2014 Annual Report
Design and Print by Modern Printers: 056 7721739 2014 Annual Report and Accounts 14 Highlights 2014 Rukwa Coal to Power (RCPP) l Completion of Phase 1, Stage 1 (Concept Study) of the Definitive Mining Feasibility Study (DMFS) on the Rukwa Mineral Resource Target Programme for 2015/2016 RCPP l l l l l l Completion of the Pre-feasibility Study (“PFS”) for the associated 250-350 MW coal fired thermal power plant construction Completion of the preliminary base case financial model based on the results of the DMFS and the PFS Agreement reached with Tanzanian Government on terms of reference under which a Power Purchase Agreement, Grid Connection Agreement and Coal Sale Agreement for RCPP will be concluded Negotiations progressed to advanced stage with a number of potential co-development partners resulting in recent announcement (20th April 2015) on the signing of a Joint Development Agreement with China based EPC contractor, SEPCOIII. Complete Integrated Coal to Power Definitive Feasibility Study on the RCPP Complete Financial Close for the project by the end of 2015 and commence construction in early 2016. Imweru l Complete Definitive Feasibility Study Haneti l l Complete geophysical interpretation study based on newly available high resolution airborne geophysical survey data from recent Tanzanian Government survey Implement drill programme at Haneti on priority targets at Mihanza and Mwaka Hills. Imweu Project (Gold) l l l l Revised Mineral Resource estimate for project of 15.0 million tonnes at 1.14 g/t gold, 0.4 g/t cutoff (550,000 oz.) based on successful drill programme completed in December 2013 Optimisation and financial modelling indicates potential feasibility for mine development Commencement of Definitive Mining Feasibility Study on project with completion of Preliminary Economic Assessment (PEA) report Results of PEA indicate potential mine life of 7-10 years based on current Mineral Resource with potential to extend by a further 6 years based on expansion of current resource. Haneti Project (Ni-Cu-PGM) l Independent consultant geochemical report confirms that the Mihanza Hill soil and rock anomaly “indicates a signature with the potential to represent a significant magmatic Ni-Cu sulphide source”. Morogoro (Gold) and Pinewood (Uranium) projects l Joint Ventures secured which can see up to US$800,000 expenditure on each project by JV partner to maintain a 50% interest in the projects. Pinewood & Morogoro l Re-commence exploration under Joint Ventures with Metal Tiger on Pinewood Uranium and Morogoro Gold Projects. Contents Chairman’s Statement IV Review of Activities VII Financial Statements for the 12 month XX period ended 31 December 2014 Financial Statements – Contents 1 Notice of Annual General Meeting 55 Form of Proxy 58 Programme for 2015 - 2016 14 I (inside back cover) KIBO Mining PLC Annual Report and accounts 2014 Exploration & development Projects KIBO Mining PLC Annual Report and accounts 2014 II * *The Rukwa Coal to Power Project (RCPP) was renamed the Mbeya Coal to Power Project (MCPP) on the 26th May 2015. All references in this report to Rukwa Coal and the Rukwa Coal to Power Project refer to the now named Mbeya Coal and Mbeya Coal to Power Project. III KIBO Mining PLC Annual Report and accounts 2014 Chairman’s Statement Dear Shareholder, Introduction It is with great satisfaction that I introduce Kibo’s 2014 Annual Report which I am pleased to say reflects further significant progress towards realising the development of the Company’s two flagship capital projects, the Rukwa Coal to Power Project (“RCPP”) and the Imweru gold project (“Imweru”). The highlight during the period was the Company’s decision to commence definitive feasibility studies on both projects in August 2014 with delivery on schedule by the end of December. These first phase reports comprised a Concept Study (first part of Definitive Mining Feasibility Study (DMFS)) on the Rukwa Mineral Resource, a Power Pre-feasibility Study (PFS) on the thermal power plant component of the RCPP and a Preliminary Economic Assessment (PEA) for the Imweru Resource representing the first part of the DMFS report on this project. The results of these reports were very positive and I am delighted to report exceeded the Company’s expectations across all aspects of the studies. The favourable RCPP report results were key to the successful negotiation of a Joint Development Agreement (“JDA”) with China based EPC contractor SEPCOIII on the project which was recently announced in April 2015. Operational Taken together, the results of the Concept Study report and the PFS, carried out by experienced consultants Minxcon and Aurecon respectively, establish detailed technical and financial base case project models under conservative assumptions. Significantly, the results of this work demonstrate strongly positive economic returns from the RCPP. This can be seen in the range of estimated economic indicators for the project based on a preliminary base case financial model constructed by Standard Bank and drawing its inputs from the feasibility reports. The highlights of these estimates include revenues in the range US$7.8 to $8.4 billion, NPVs in the range US$230-US$280 million, IRR on pretax equity of >23% and a payback period of 8 to 9 years. Albeit that these are preliminary estimates, I would note that that these are impressive figures and more than vindicate management’s belief in the potential of the RCPP to deliver significant investment return for all stakeholders, including a substantial contribution to the socio-economic development of Tanzania. These estimates have been further refined following the recent completion of an Integrated Pre-feasibility Study Report for the RCPP which consolidated the results of the separate coal mining and power generation reports. KIBO Mining PLC Annual Report and accounts 2014 IV The signing of the JDA with SEPCOIII post year the search for suitable joint venture partners for the development of the RCPP and should enable the PEA should strengthen our negotiating hand end (April 2015) represents another major step in the Company to complete its Definitive Feasibility Study by the end of this year and proceed to enter the construction phase of the project which is scheduled for completion by the end of 2018. In regard to the Company’s other capital project, Imweru, I am pleased to report that substantial progress has also been made during 2014 on our goal of fast-tracking a gold mine development based on the existing Mineral Resource of c.550,000 oz gold (~ 15 million tonnes at 1.14 g/t, of which Kibo’s attributable interest is 90%). The positive results from internal technical and financial studies on the project in the early part of 2014 resulted in the Company deciding to initiate a DMFS for the project in July 2014, with the delivery of the first stage PEA report in November 2014. The results of this study showed a positive economic outcome for a base-case development the project and I am confident that the results of in this regard. I am also greatly encouraged by the results of our desktop studies during the year on the Haneti project where we have continued to interrogate our large exploration database. The highlight of our 2014 studies was the results of an independent assessment of the soil and rock multi-element geochemistry by an experienced consultant geochemist. The positive results from this assessment greatly enhanced the quality of the Mihanza drill target in particular and confirmed the overall nickel-copper-PGM prospectivity of Haneti. The Company is now embarking on a regional geophysical interpretation study at Haneti following the acquisition of high resolution airborne geophysical data from the Geological Survey of Tanzania. supporting a mine life of 6 to 10 years and the Like Haneti, field exploration on our Pinewood years contingent on expansion of the existing gold suspended during 2014 to allow resources to potential to increase the mine life by an extra 6 resource by further exploration. These results have enabled the Company to move with confidence to the next phase of work within the DMFS, which is the completion of a Pre-feasibility Study on the project. I welcome the emerging positive results from the Imweru DMFS as they fully support the Company’s strategy of pursuing a fast-track development at Imweru in order to create early cash flow. Such cash flow can be used to fund expansion of the established resource as well as conducting exploration on adjacent projects in the region. These adjacent projects include Lubando, already with a Mineral Resource of 168,000 oz. (~ 2.59 million tonnes at 2 g/t, of which Kibo also holds a 90% attributable interest), and drill ready targets at Pamba and Sheba. This strategy also includes V (uranium) and Morogoro (gold) projects was be directed towards the RCPP and Imweru. I am pleased that the Company has been successful in finalising separate joint ventures on each project with AIM-listed Metal Tiger Plc under broadly similar terms. These see Metal Tiger funding up to US$800,000 on each project in licence fees and exploration expenditure over 3 years to maintain a 50% interest in the projects. This is a welcome development for Kibo as it allows the Company to once again resume exploration on these areas that are an important part of Kibo’s commoditydiverse asset portfolio within Tanzania. The equity investment by Metal Tiger in Kibo and the warrants issued to it under the terms of the joint ventures have also provided Kibo with short term funding that has assisted with our on-going KIBO Mining PLC Annual Report and accounts 2014 working capital requirements. The joint ventures As part of our on-going efforts to continually independent belief in Kibo’s projects and its ability also launched a re-designed Company website, and investment by Metal Tiger is a testament to to deliver for investors. In conclusion, I note that the progress made during 2014 has now allowed us to secure a co- improve investor communication over 2014 we increased the frequency of market updates and investor presentations for which I thank shareholders for their positive feedback. development partner for the RCPP and re-activate Finally, I wish to thank our CEO Louis Coetzee and in care and maintenance during 2012 and 2013. This dedication which has paid substantial dividends exploration on all our projects, many of which were is particularly pleasing in light of the continuing adverse market conditions for accessing funding for early stage exploration and development projects. his management team for their persistence and during 2014 and look forward to more significant progress during 2015 and beyond across all our commodity streams. Corporate Following our corporate re-organisation in 2013 which included the retirement of three directors, 2014 was a relatively uneventful period on the corporate front as management’s energy was focussed on the operational advances discussed in Christian Schaffalitzky the previous section. The appointment of Andreas Lianos to the Board from the 1st March 2014 as Financial Director concluded the board changes commenced in 2013 and enhanced the key executive management team with the necessary experience and capability to take the Company to the next stage of its development. There were three placings completed during 2014 which raised a total of £2.2 million at prices of between 1.5p and 2.5p. These were all done in continuing adverse market conditions for equity raisings. As Shareholders will see from this report, the Annual Financial Statements reflect a reversal of previously recognised impairment of our intangible assets to the value of £8.1 million, together with impairment charges of £3.4 million, resulting in an increase in the carrying value of intangible assets from £9.7 million at 31 December 2013 to £14.4 million at 31 December 2014. KIBO Mining PLC Annual Report and accounts 2014 VI review of aCtivities Regional Location of Kibo Projects in Tanzania Introduction Rukwa Coal to Power Project across the the Company’s project portfolio during Company’s development plans for its Rukwa Coal A discussion of the principal activities carried out 2014 is presented in the following sections. In addition to the activities discussed, Kibo continued to evaluate, prioritise and rationalise its large earlier stage tenement holdings during the period in order to focus resources on those areas which the Company believes offers the best opportunities for exploration success. 2014 marked another milestone year in the to Power Project (“RCPP”) with the completion of both Stage 1, Phase 1 of the Definitive Mining Feasibility Study (DMFS) on the Rukwa Mineral Resource and the Pre-feasibility Study (“PFS”) for the associated 200- 300 MW coal fired thermal power plant proposal. The RCPP is the Company’s flagship project located in southern Tanzania, 70 kilometres north of the regional town of Mbeya VII KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 Rukwa Project Licence Status at 31 Dec 2014 and has already obtained key Government support with its inclusion in Tanzania’s National Energy Strategy during 2013. The results from these recently completed feasibility reports exceeded the Company’s expectations in all respects and have further de-risked the Project, significantly increased its intrinsic value and provided a robust platform on which to complete the Definitive Feasibility Study of which the DMFS Stage 1, Phase 1 (mining) and PFS (power generation) reports are the initial output. This study which is currently underway has recently received a major boost with the signing of a Joint Development Agreemen (“JDA”) with China based EPC contractor, SEPCOIII (April 2015). Under the terms of the JDA, SEPCOIII Definitive Mining Feasibility Study (“DMFS”) The commencement of Stage 1, Phase 1 (Concept Study Report) of the Rukwa DMFS was announced in July 2014 with the appointment of South African consulting group Minxcon Projects (Minxcon) of South Africa to carry out the study. Minxcon delivered a final report to the Company in early December 2014, the results of which were very favourable for a mine development on the Rukwa Mineral Resource (JORC-Compliant 109 Mt coal resource). The report highlights were released to the market on the 9th December 2014 and include: l will co-fund completion of the DFS during 2015 and development with the project financially participate as a minority equity holder and sole feasible for all four alternative options EPC contractor to the project during the follow- evaluated; on construction phase which is scheduled to be completed by the end of 2018. Four alternative options identified for project l Capital Investment of between US$46 million and US$89 million required; KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 VIII l Circulating Fluidised Bed option to be evaluated Annual coal sale revenues estimated between at Feasibility Study stage; US$37 million and US$44 million depending on the selected option; l l million to US$760 million depending on plant All-in Cost Margin estimates of 38% to 45% configuration; (equates to an indicative annual margin of US$14.8 million to $19.4 million); l l gigawatt hours per annum and 1,877 gigawatt discount rate with payback period 3.9 to 4.7 hours per annum; years. options considered were calculated under conservative assumptions and demonstrated the Indicative annual power generated (dependent on plant option selected) between 1,841 NPV of US$116 million to US$141 million at 5.7% These financial estimates for the development Total capital cost estimated at between US$640 l High level environmental risks analysed identifying no major obstacles to development; robustness of the mining element of the RCCP. Additional Rukwa Mineral Resources sufficiently RCPP is expected to come from the thermal power size to 300 megawatts or to be used in alternate The greater proportionate economic value of the generation component which was confirmed by the results of the Power Pre-feasibility study and base case financial modelling reviewed in the next sections. large to potentially double the current design energy conversion technologies. These results exceeded the Company’s expectations in terms of the very strong technical and financial base case fundamentals for the thermal power Power Pre-feasibility Study (“PPS”) On completion of Stage 1, Phase 1 (Concept Study) of the DMFS in late November 2014, and following the results of a tender process, the Company appointed international engineering and project management group Aurecon to complete a PPS on the proposed thermal coal plant. Aurecon’s generation component of the RCPP. The report also identified the Rukwa coal resource as being of sufficient size to support significant expansion of the base case power output capacity or for use in other downstream value generation projects e.g. conversion of coal to gas. involvement in successfully developed coal-fired Base Case Financial Model the Tanzania power infrastructure and its on-going the PPS, the Company together with its appointed power plants in Africa, its particular knowledge of relationships with key parastatal organisations such as TANESCO enabled it to complete the PPS within one month. The Report highlights were released to the Market on the 18th December 2014 and include: l Four thermal plant configurations with a recommendation for a 2 X 150 megawatt IX Based on the positive results from the DMFS and financial advisor to the RCPP, Standard Bank, prepared a preliminary base case financial model, the results of which were announced with the PPS results on the 18th December 2014. This financial model provides a first pass economic assessment of the RCPP based on the integration of the DMFS (Mining) and PFS (power generation) results to date. The headline operational and financial KIBO Mining PLC Annual Report and accounts 2014 RCPP – Regional Infrastructure estimates resulting from this model are as follows: l Estimated indicative Life of Plant revenues of approximately US$7.8 billion to US$8.4 billion; l Indicative project NPV of between US$230 million and US280 million (at a 15% discount rate); Stakeholder Agreements In addition to the RCPP reports summarised above, agreement was also reached during 2014 in negotiations by the Company with relevant Tanzanian Government Departments and Utilities on the framework and terms of reference under which a Power Purchase Agreement and Grid Connection Agreement will be concluded. These l Indicative pre-tax equity IRR > 23%; and l Indicative post-tax payback of 8 to 9 years. Agreements will be critical inputs to the final integrated feasibility study for the RCPP. These results provide a preliminary estimate of the overall economic viability of the RCPP and a solid foundation for the Company to continue with completing final Definitive Feasibility Studies for both the mining and power generation components of the RCCP which are now in progress. KIBO Mining PLC Annual Report and accounts 2014 X Partner Negotiations JDA which will take the project through completion number of potential co-development partners for close by the end of 2015 with construction and of the investment and the scale of the development by the end of 2018. SEPCOIII will contribute up to energy sector investor to see it come to fruition. 2015 after which the project will be transferred to From these negotiations, the Company has position will be a minimum of 85%. The Company has conducted negotiations with a of the Definitive Feasibility Study and financial the RCPP over the last two years, as the magnitude commissioning of power plant to be completed will require a financially strong and experienced US$3 million toward completing the DFS during a Special Purpose Vehicle in which Kibo’s equity realised that the further it can de-risk the project by demonstrating its technical and financial feasibility, the better the joint venture or investment terms it will be able to secure, thereby securing optimal value for Kibo’s shareholders. This strategy has paid off with the Company’s recent announcement in April 2015 that it has selected China based EPC contractor, SEPCOIII as its preferred co-development partner and signed a RCPP- Proposed Project Layout XI KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 Examples of two Mining Methods being considered for the RCPP, Suface Miner (top) and Truck & Excacator (bottom)- (From Mincon Concept Study Report) KIBO Mining PLC Annual Report and accounts 2014 XII Review of Activities Lake Victoria Project Projects (Minxcon) as the preferred independent During 2014, the Company continued to implement structured in two stages comprising an initial studies on its Imweru Mineral Resource which DMFS (Stage 2). The first part of Stage 1 known as a 0.4 g/t cut-off (c.550,000 oz.) in the Indicated optimisation and financial reports produced drilling programme implemented in late 2013, more detailed integrated and independent scoping reports on the project, based on a revised Mineral released to the market after the reporting period February 2014. This work commenced in March of the earlier internal reports. The highlights from Imweru consultants to carry out the work. The DMFS was technical and economic desktop evaluation Pre-feasibility Study (Stage 1) followed by the comprises 15.0 million tonnes at 1.14 g/t gold at a Preliminary Economic Study built on the earlier and Inferred categories. Following the successful internally by the Company in order to provide a the Company completed economic assessment study for Imweru. The results of the study were Resource estimate which was announced in end in February 2015 and substantiated the results 2014 in collaboration with the Company’s technical the PEA are: optimisation report and preliminary financial l consultants and resulted in the production of an with an initial Life of Mine of 7-10 years; a gold mine at Imweru. The work was completed in early September 2014 and the results were highly l mine life by up to a further 6 years; development. Additionally, the studies indicated confidence that additional exploration at Imweru l and contractor operated; potential development. made a decision in October 2014 to proceed to a full DMFS at Imweru and appointed Minxcon XIII The project is financially feasible based on two options investigated, namely owner operated thus extend significantlying the mine life of any Buoyed by this positive assessment, the Company Exploration plan proposed to expand the Imweru Mineral Resource and thus extend the hold sufficient gold resource to support a gold mine could supplement the existing gold resource and base case for accelerated development of the project was established model to assess the economic viability of developing encouraging. This established that Imweru does An optimised l The estimated cash flow from initial operations is deemed sufficient to enable the Company to self-fund wider resource expansion and further KIBO Mining PLC Annual Report and accounts 2014 Lake Victoria Project – Licence Status and Sub-projects at 31 Dec 2014 development of the Imweru Project, and contribute towards exploration development costs of other Company assets in the Lake Victoria Goldfields region The results of these studies confirm the technical and financial viability of Imweru as a stand-alone gold mine development, with the potential to generate sufficient cash flow to self-fund gold resource expansion at the mine itself and for exploration on earlier stage projects, within the greater Lake Victoria project. The positive outcome from these studies has provided Kibo with the confidence to proceed to the next step in its goal of fast-tracking a gold mine development on the project. This step comprises the completion of a full pre-feasibility study for Imweru which is scheduled for completion during 2015. The study results also provide the Company with key commercial data to allow it to negotiate confidently with potential joint venture partners Other Projects In addition to Imweru, Kibo holds a geographically diverse portfolio of earlier stage gold licences and applications all located within or adjacent to gold productive greenstone belts within the Lake Victoria project. These range from Lubando on which already exists a JORC-compliant gold Mineral Resource of 2,593,710 tonnes at 2 g/t, 0.5 g/t cut-off (168,300 oz.) to Sheba, Pamba, Busolwa and Mhangu where drilling targets have already been defined from historical exploration carried out both by Kibo and by previous operators. Fieldwork on these areas was suspended during 2013 and 2014 as resources were directed to the Company’s development projects at Imweru and Rukwa. Contingent with exploration funding becoming available either through joint venture agreements in the short term or from cash flows at Imweru in the medium term, work will resume on these areas and phased in over 2015-2016 starting with priority drill target areas at Sheba and Lubando. and actively pursue possibilities in this regard. KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 XIV Imweu Project- Location of Modelled Open Pits (Minxcon Preliminary Economic Assessment Report, 2014) Kibo Gold Strategy Imweru XV KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 Review of Activities Haneti Project improves the probability of exploration success”. exploration database, by conducting detailed assessment of the nickel-copper-PGM prospectivity consultants in preparation for the next field drilling at Mihanza in particular, but also for in 2015 and include drilling of priority targets. The the remaining target areas. in March 2014, followed completion of an internal While Kibo was not in a position to resume field high priority Ni-Cu-PGM drill targets at the Mwaka were directed towards its more advanced coal pegmatite lithium-niobium-tantalum Imweru respectively, the work from the desktop corridor (Londoni-Hombolo-Mosangani) along the approach a follow-up field programme with During 2014, Kibo has leveraged its extensive Haneti Overall the study provides a positive independent desktop studies in conjunction with independent of Haneti with recommendations for near-term programme which it anticipates will take place extension and infill of soil & rock sampling over first report, the results of which were announced technical report on the project, confirmed two exploration at Haneti during 2014 as resources Hill and Mihanza Hill prospects, the potential for and gold development projects at Rukwa and mineralisation and the key gold prospective studies undertaken will allow the Company to south western edge of the project. improved confidence. Contingent on project hosted A second study by Perth based consultant geochemists Geoservices Pty Ltd evaluated in detail the soil and rock geochemical results over the nickel-copper-PGM prospective geology on the project. The results of this study, which were announced just after period end in January 2015, confirmed that the Mihanza Hill geochemical anomaly..... “Indicates a signature with the potential to represent a significant magmatic Ni- budget availability, the Company plans to resume field work on the project during 2015 and the main element of the work planned will be drilling on the Mihanaza and Mwaka targets. The Company is currently processing and interpreting newly available Government flown aero-geophysical data over the project as part of its continuing preparation for the next phase of exploration on the project. Cu sulphide source”. The study also notes that the characteristics of the Mihanza anomaly suggests a “possible chonolith intrusion which dramatically KIBO Mining PLC Annual Report and accounts 2014 XVI Haneti Project- Licence Status at 31 December 2014 Haneti Project-Mihanza Hill Geochem. Anomaly and Drill Target XVII KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 Morogoro Gold and Pinewood Uranium Projects These MOUs have now been followed by the in regard to commodity, exploration stage and projects to be maintained by combined licence asset portfolio. Morogoro provides exposure to a of US$800,000 over a period of 3 years for each away from the traditional gold producing areas but less than US$800,000 would see Metal Tiger’s complements the RCPP as an early stage uranium interest while any expenditure by Metal Tiger less where the Tanzanian government has prioritised interest in the project. Metal Tiger also made an significant investment and discovery success in signing of the first MOU on Pinewood and were projects are part of Kibo’s pipeline of early stage under the joint venture terms for both Pinewood signing of full Joint venture agreements which These projects provide further diversification grant Metal Tiger a 50% equity interest in the geological setting within Kibo’s overall mineral maintenance and exploration of expenditure new gold exploration region in central Tanzania project. A minimum expenditure of US$300,000 such as the Lake Victoria Goldfield, while Pinewood interest in a project revert to a 10% free carried and coal play, in a region (southern Tanzania) than USD300,000 would see Kibo regain 100% energy development projects and which has seen equity investment in Kibo coinciding with the both commodities in recent years. Both of these also granted Kibo warrants with three year terms exploration projects that have the potential for and Morogoro. significant value increase with additional work and contingent on exploration success. Field exploration remained suspended on both projects during 2014 as Kibo prioritised resources towards the Rukwa and Imweru projects. However, the provision of resources for the resumption of exploration on these projects was considerably enhanced towards the end of 2014 and in early 2015 with the signing of separate binding Memorandums of Understanding (“MOU”) with AIM listed, Metal Tiger Plc for the establishment of joint ventures on both projects. KIBO Mining PLC Annual Report and accounts 2014 XVIII Morogoro Project- Licence Status at 31 December 2014 Pinewood Project –Licence Status at 31 Decemebr 2014 XIX KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 Financial Statements KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 KIBO Mining PLC Annual Report and accounts 2014 20 Financial StatementS _________ Contents Corporate Directory 2 Directors’ Report 4 Independent Auditor’s Report 15 Consolidated Statement Of Comprehensive Income 17 Consolidated Statement Of Financial Position 18 Company Statement Of Financial Position 9 Consolidated Statement Of Changes In Equity 20 Company Statement Of Changes In Equity 21 Consolidated Statement Of Cash Flows 22 Company Statement Of Cash Flows 23 Summary Of Significant Accounting Policies 24 Notes To The Consolidated And Company Financial Statements 30 Appendix 1: Headline Earnings Per Share 50 Appendix 2: Listing Of Exploration Licences 51 Notice Of The Annual General Meeting 55 1 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC COPORATE DIRECTORY ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 DIRECTORS: COMPANY SECRETARY: REGISTERED OFFICE: BUSINESS ADDRESS - IRELAND: BUSINESS ADDRESS - TANZANIA: AUDITORS STOCK EXCHANGE LISTING: SHARE REGISTRARS: PRINCIPAL BANKERS: Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Andreas Lianos Lukas Maree Wenzel Kerremans Noel O’Keeffe Chairman (Non-Executive) Chief Executive Officer (Executive) Technical Director (Executive) Chief Financial Officer (Executive) Non-Executive Director Non-Executive Director 27 Hatch Street Lower Dublin 2 Ireland Gray Office Park Galway Retail Park Headford Road Galway, Ireland Telephone: +353 91 511463 Fax +353 91 450018 Email: [email protected] Amani Place 10th Floor, Wing A Ohio Street Dar es Salaam, Tanzania Telephone: +255 22 2127857 Fax +255 22 2126049 Saffery Champness Lion House Red Lion Street London WC1R 4GB London Stock Exchange: AIM - (Share code: KIBO) – Primary Listing Johannesburg Stock Exchange: JSE Alt X - (Share Code: KB0) – Secondary Ireland & United Kingdom Computershare Investor Services (Ireland) Ltd Heron House Corrig Road Sandyford Industrial Estate Dublin 18 South Africa Computershare Investor Services (Pty) Ltd 70 Marshall Street Johannesburg 2001 (P.O. Box 61051, Marshalltown 2107) Allied Irish Banks p.l.c. Tuam Road Galway Ireland KIBO Mining PLC Annual Report and accounts 2014 2 2 KIBO MINING PLC COPORATE DIRECTORY ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 BROKERS: Hume Capital Securities Plc 1 Carey Lane London EC2V 8AE United Kingdom Beaufort Securities Limited 131 Findbury Pavement London EC2A 1NT United Kingdom As to Irish Law: McEvoy Partners 27 Hatch Street Lower Dublin 2 Ireland SOLICITORS: As to English Law: Ronaldson’s LLP 3rd Floor 55 Gower Street London WC1E 6HQ As to Tanzanian Law: Rex Attorneys Rex House 145 Magore Street P.O. Box 7495 Dar es Salaam Tanzania UK NOMINATED ADVISER: RFC Ambrian Limited Level 28, QV1 Building 250 St Georges Terrace Perth WA 6000 JSE DESIGNATED ADVISER: River Group 211 Kloof Street Waterkloof Pretoria, South Africa UK PUBLIC RELATIONS: Bell Pottinger Holborn Gate 330 High Holborn London WCIV 7QD WEBSITE: www.kibomining.com DATE OF INCORPORATION: 17 January 2008 REGISTERED NUMBER: 451931 3 KIBO Mining PLC Annual Report and accounts 2014 3 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 The Board of Directors present their Annual Report together with the audited annual financial statements for the year ended 31 December 2014 of Kibo Mining Plc (“the Company”) and its subsidiaries (collectively “the Group”). The Board comprises a Non-Executive Chairman, three Executive Directors and two Non-Executive Directors. As the Company evolves, the Board will be reviewed and expanded if necessary to ensure appropriate expertise is in place at all times to support its business activities. The Board is responsible for formulating, reviewing and approving the Company's strategy, budgets, major items of capital expenditure and acquisitions. An agenda and all supporting documentation is circulated to all Directors before each Board Meeting. Open and timely access to all information is provided to all Directors to enable them to bring independent judgement on issues affecting the Company and facilitate them in discharging their duties. At the end of the financial year, and date of this report, the board of Directors comprised: Christian Schaffalitzky - Chairman (Non-Executive) Louis Coetzee - Chief Executive Officer (Executive) Andreas Lianos - Chief Financial Officer (Executive) Noel O’Keeffe - Technical Director (Executive) Lukas Maree (Non-Executive Director) Wenzel Kerremans (Non-Executive Director) Christian Schaffalitzky, BA (Mod), FIMMM, PGeo, CEng, Age 61 – Chairman (Non-Executive) Christian Schaffalitzky is managing Director of Eurasia Mining Plc a company trading on AIM. From 1984 to 1992, he founded and managed the international minerals consultancy, CSA Company's, now CSA Global Pty Ltd. With over 30 years’ experience in minerals exploration, Christian Schaffalitzky was a founder of Ivernia West Plc, where he led the exploration and was instrumental in the discovery and development of the Lisheen zinc deposit in Ireland. More recently, he was managing Director of Ennex International Plc an Irish quoted mineral exploration Company, focused on zinc development projects. He has also been engaged in precious and base metal mineral exploration and development in the former Soviet Union and until recently an independent director on the boards of Russian companies, Raspadskaya Coal Company and Chelyabinsk Zinc. Louis Coetzee, BA, MBA , Age 50 – Chief Executive Officer (Executive) Louis Coetzee has 25 years’ experience in business development, promotion and financing in both the public and private sector. In recent years he has concentrated on the exploration and mining arena where he has founded, promoted and developed a number of junior mineral exploration companies based mainly on Tanzanian assets. Louis has tertiary qualifications in law and languages, project management, supply chain management and a MBA from Bond University (Australia) specialising in entrepreneurship and business planning and strategy. He has worked in various project management and business development roles mostly in the mining industry throughout his career. Between 2007 and 2009, he held the position of Vice-President, Business Development with Canadian listed Great Basin Gold (TSX: CBG). Noel O’Keeffe , BSc (Hons), Geology, MBA, Age 51 – Technical Director (Executive) and Company Secretary Noel O'Keeffe has over 20 years’ experience in mineral exploration and has worked on a variety of base metal and gold projects in Ireland, Canada, Australia and Africa. Prior to co-founding Kibo in 2008 he worked as a quality coordinator with Boston Scientific (Ireland) Ltd, a multinational medical device Company. He also worked part-time for Irish geological services Group, Aurum Exploration Ltd during 2003 and early 2004. During the mid-nineties he was exploration manager with Ormonde Mining Plc in Tanzania, a Company currently listed on the Irish Stock Exchange and on AIM. Previously Noel was a senior geological consultant with BDA Consultants Limited and worked on both government and private sector contracts. Earlier in his career, Noel worked as a geologist for Burmin Exploration and Development Plc and for its Canadian and Australian subsidiaries. Lukas Marthinus Maree, BLC, LLB, Age 52 - (Non-Executive) Lukas Maree is a lawyer by profession. He has served on the boards of a number of public companies including Goldsource Mines Limited, Africo Resources Limited and Diamondworks Limited that have made significant successful investments in exploration projects in Africa and North America, and has more recently served as the CEO of private investment companies Rusaf Gold Limited and Mzuri Capital Group Limited, both of which have successfully developed and sold mineral projects in Russia and Tanzania in the last seven years. He was also a founder principal of River Group, Designated Advisors to the Listing of Kibo on the JSE, and was responsible for its Canadian office until his retirement from the Group in 2013 to pursue personal interests. KIBO Mining PLC Annual Report and accounts 2014 4 4 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Wenzel Kerremans, B.Proc, LLB, LLM, Adv. Dip. Age 56 - (Non-Executive) Wenzel Kerremans is a lawyer by profession with over 25 years international legal experience in mining, banking, project finance and international tax, advising clients who have invested in exploration and mining projects in Africa. He has also originated and succesfully sold Veremo Holdings Limited a billion ton titaneferous magnetite exploration project for the production of iron and titanium slag. Wenzel is also the principal and director of a gold, graphite and coal exploration project in Africa. Andreas (Andrew) Lianos, CA, ACMA , Age 49 – Chief Financial Officer (Executive) Andrew is a chartered accountant (CA (SA)), certified management accountant (ACMA), certified internal auditor (CIA) and JSE qualified executive who started his professional career in 1989 with Grant Thornton International. Andrew entered the corporate finance industry in 1994 by joining Deloitte & Touche Corporate Finance. In 1996 he joined Smith Borkum Hare/Merrill Lynch Corporate Finance, and was part of the team that founded Labyrinth Corporate Finance during 1997. He has substantial transaction experience in the resources, food- and leisure industries. Andrew has served on the boards of a number of private and public companies. Andrew co-founded the River Group, Kibo’s JSE Designated and Corporate Advisor and is a director of River Capital Partners Ltd. He is also currently a director of Boudica Trust Co Limited (trading as Boudica Group). Andrew has been involved in a number of successful cross-border restructurings and resource transactions in Canada, the Central African Republic, Sierra Leone, Angola, Zambia, Zimbabwe, Tanzania and South Africa. Review of Business Developments As set out in the Chairman’s Report and review of activities, as well as continuing with its exploration program, the Company significantly decreased its exploration ground holdings in Tanzania during the period, and continued the development of its feasibility studies toward mining of the identifiable viable resources. Rukwa The Company commenced a Definitive Mine Feasibility Study (“DMFS”) at Rukwa in the the second half of 2014 and the results emerging to date are highly encouraging. Modelling studies indicate sufficient coal within the current Mineral Resource to sustain the proposed thermal power plant for a period of up to 40 years. Equally encouraging are the results of a Pre-feasibility Study on the thermal power generation component of the project also completed during 2014. Kibo is now continuing with completion of a full integrated coal-power bankable feasibility study and on the Rukwa Coal to Power Project (RCPP) which it expects to complete during 2015. An important part of the feasibility studies on the Rukwa coal mine will be further drilling and associated technical surveys to increase confidence in the existing resource to test for additional coal resources over the rest of the project, for which the Company believes there is excellent potential. Apart from supplying the planned thermal coal plant, additional markets for the coal will also be explored such as export and for coal to gas conversion. Imweru The Companies near-term plans for its Lake Victoria projects will be primarily focused on Imweru where work is on-going. An internal optimization study which was validated by the Companies independent consultants (August 2014), has established the potential viability of the existing Imweru Mineral Resource to support an economic mining operation. Based on these results Kibo commenced a Definitive Mining Feasibility Study (“DMFS”) on the project during the second half of 2014 with the first output from this study, a Preliminary Economic Assessment (“PEA”) by independent consultant Minxcon, showing favorable economic indicators for development of a gold mine on the existing Mineral Resource. The next element of work on the DMFS will comprise the completion of the Prefeasibility Study for the project which is planned for 2015. The results of the 2014 economic and technical studies at Imweru indicate the potential to increase the Company’s total gold resource in the region and extend the life of the modelled base case gold mine development. 5 KIBO Mining PLC Annual Report and accounts 2014 5 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Haneti In early 2015, the Company received the results of an independent geochemical assessment of its historic soil and rock sample multi-element analytical results for Haneti carried out on its behalf by Australian consultants. The assessment report concluded that the Mihanza Hill soil and rock anomaly shows strong geochemical characteristics to those that may be expected to overlie a “chondrite” type Ni-Cu-PGM sulphide target .This results has significantly improved the quality of this target for nickel sulphide mineralisation as well as validating the prospectivity of the rest of the Haneti Itiso Ultramafic Complex for this style of nickel sulphide mineralisation. Principal Risks and Uncertainties The realisation of exploration and evaluation assets is dependent on the discovery and successful development of economic mineral reserves and is subject to a number of significant potential risks summarised as follows: Commodity price fluctuations; Foreign exchange risks; Uncertainties over development and operational costs; Political and legal risks, including arrangements with governments for licences, profit sharing and taxation; Currency exchange fluctuations and restrictions; Foreign investment risks including increases in taxes, royalties and renegotiation of contracts; and Liquidity risks. In addition to the above there can be no assurance that the current exploration program will result in profitable mining operations. The recoverability of the carrying value of exploration and evaluation assets is dependent on the successful discovery of economically recoverable reserves, the achievement of profitable operations, and the ability of the Company to raise additional financing, if necessary, or alternatively upon the Company’s ability to dispose of its interests on an advantageous basis. Changes in market conditions could require material write downs of the carrying value of the Company’s assets. Financial instrument risk The Company and Group are exposed to risks arising from financial instruments held. These are discussed in Note 20 to the Annual Financial Statements. Strategic risk Significant and increasing competition exists for mineral acquisition opportunities throughout the world. As a result of this competition, the Company may be unable to acquire rights to exploit additional attractive mining properties on terms it considers acceptable. Accordingly, there can be no assurance that the Company will acquire any interest in additional operations that would yield reserves or result in commercial mining operations. The Company expects to undertake sufficient due diligence where warranted to help ensure opportunities are subjected to proper evaluation. Commercial risk The mining industry is competitive and there is no assurance that, even if commercial quantities of minerals are discovered, a profitable market will exist for the sale of such minerals. There can be no assurance that the quality of the minerals will be such that the Company properties can be mined at a profit. Factors beyond the control of the Company may affect the marketability of any minerals discovered. Mineral prices are subject to volatile price changes from a variety of factors including international economic and political trends, expectations of inflation, global and regional demand, currency exchange fluctuations, interest rates and global or regional consumption patterns, speculative activities and increased production due to improved mining and production methods. Ultimately, the Company expects that prior to a development decision; a project could be the subject of a feasibility analysis to ensure there exists an appropriate level of confidence in its economic viability. Funding risk In the past the Company has raised funds via equity contributions from new and existing shareholders, thereby ensuring the Company remains a going concern until such time that revenues are earned through the sale or development and mining of a mineral deposit. There can be no assurance that such funds will continue to be available on reasonable terms, or at all in future. The Directors regularly review cash flow requirements to ensure the Company can meet financial obligations as and when they fall due. KIBO Mining PLC Annual Report and accounts 2014 6 6 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Operational risk Mining operations are subject to hazards normally encountered in exploration, development and production. These include unexpected geological formations, rock falls, flooding, dam wall failure and other incidents or conditions which could result in damage to plant or equipment or the environment and which could impact any future production throughout. Although it is intended to take adequate precautions to minimise risk, there is a possibility of a material adverse impact on the Company’s operations and its financial results. The Company will develop and maintain policies appropriate to the stage of development of its various projects. Staffing and Key Personnel Risks Recruiting and retaining qualified personnel is critical to the Company’s success. The number of persons skilled in the acquisition, exploration and development of mining properties is limited and competition for such persons is intense. While the Company has good relations with its employees, these relations may be impacted by changes in the scheme of labour relations which may be introduced by the relevant governmental authorities. Adverse changes in such legislation may have a material adverse effect on the Company’s business, results of operations and financial condition. Staff are encouraged to discuss with management, matters of interest to the employees and subjects affecting day-to-day operations of the Company. Speculative Nature of Mineral Exploration and Development Development of the Company’s mineral exploration properties is, amongst others, contingent upon obtaining satisfactory exploration results and securing additional adequate funding. Mineral exploration and development involves substantial expenses and a high degree of risk, which even a combination of experience, knowledge and careful evaluation may not be able to adequately mitigate. The degree of risk reduces substantially when a Company’s properties move from the exploration phase to the development phase. The discovery of mineral deposits is dependent upon a number of factors including the technical skill of the exploration personnel involved. The commercial viability of a mineral deposit, once discovered, is also dependent upon a number of factors, including the size, grade and proximity to infrastructure, metal prices and government regulations, including regulations relating to royalties, allowable production, importing and exporting of minerals, and environmental protection. In addition, several years can elapse from the initial phase of drilling until commercial operations are commenced. Political Stability The Company is conducting its activities in Tanzania. The Directors believe that the Government of Tanzania supports the development of natural resources by foreign investors and actively monitor the situation. However, there is no assurance that future political and economic conditions in Tanzania will not result in the Government of Tanzania adopting different policies regarding foreign development and ownership of mineral resources. Any changes in policy affecting ownership of assets, taxation, rates of exchange, environmental protection, labour relations, repatriation of income and return of capital, may affect the Company’s ability to develop the projects. Uninsurable Risks The Company may become subject to liability for accidents, pollution and other hazards against which it cannot insure or against which it may elect not to insure because of prohibitive premium costs or for other reasons, such as amounts which exceed policy limits. Results The result for the year after providing for depreciation, impairments and taxation amounted to a profit of £2,125,004 for the year ended (31 December 2013: loss £15,583,337). Post Statement of Financial Position events There have been no material post statement of financial position events other than those stated in Note 21 to the annual financial statements. 7 KIBO Mining PLC Annual Report and accounts 2014 7 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Directors Interests The interests of the Directors and Company Secretary (held directly and indirectly), who held office at the date of approval of the financial statements, in the share capital of the Company are as follows: Ordinary Shares (held directly and indirectly) Directors & Secretary Christian Schaffalitzky Noel O’Keeffe Louis Coetzee Lukas Maree Wenzel Kerremans Andreas Lianos Directors & Secretary Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Lukas Maree Wenzel Kerremans Andreas Lianos 21/05/2015 31/12/14 31/12/13 1,859,842 2,291,447 6,765,996 2,734,200 176,241 6,288,633 1,859,842 2,291,447 6,765,996 2,734,200 176,241 6,288,633 1,715,910 714,865 4,343,616 2,590,268 32,309 3,000,000 21/05/2015 31/12/14 31/12/13 100,000 100,000 100,000 100,000 100,000 - 100,000 100,000 100,000 100,000 100,000 - 100,000 100,000 100,000 100,000 100,000 - Share Options (held directly and indirectly) The above share options are exercisable at a price of £0.582 at any time up to 31 March 2016. For further detail surrounding the ordinary shares and share options in issue, refer to Note 14 and 15 of the annual financial statements. Transactions Involving Directors There have been no contracts or arrangements of significance during the period in which Directors of the Company, or their related parties, were interested other than as disclosed in Note 19 to the annual financial statements. Directors meetings The Company held 14 (fourteen) Board meetings during the reporting period and the number of meetings attended by each of the Directors of the Company during the year to 31 December 2014 were: Director Name Position Christian Schaffalitzky Louis Coetzee Andreas Lianos Noel O’Keeffe Lukas Maree Wenzel Kerremans Chairman Chief Executive Officer Chief Financial Officer Technical Director Non-Executive Director Non-Executive Director Number of Meetings Attended Number of Meetings Eligible to Attend 13 14 13 14 12 14 14 14 13 14 14 14 In terms of the Companies Memorandum & Articles of Association, one third of Directors are required to retire by rotation from the Board on an annual basis, through resignation at the Annual General Meeting. KIBO Mining PLC Annual Report and accounts 2014 8 8 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Committee meetings The Company held 1 (one) Audit Committee meeting during the reporting period and the number of meetings attended by each of the members during the year to 31 December 2014 were: Director Name Position Christian Schaffalitzky Wenzel Kerremans Lukas Maree Chairman (Non-Executive) Non-Executive Director Non-Executive Director Number of Meetings Attended Number of Meetings Eligible to Attend 1 1 - 1 1 1 Number of Meetings Attended Number of Meetings Eligible to Attend 1 1 1 1 1 1 The Company held 1 (one) Remuneration Committee meeting during the reporting period and the number of meetings attended by each of the members during the year to 31 December 2014 were: Director Name Position Christian Schaffalitzky Wenzel Kerremans Lukas Maree Chairman (Non-Executive) Non-Executive Director Non-Executive Director The Company held 1 (one) Governance Committee meeting during the reporting period and the number of meetings attended by each of the members during the year to 31 December 2014 were: Director Name Position Christian Schaffalitzky Wenzel Kerremans Lukas Maree Chairman (Non-Executive) Non-Executive Director Non-Executive Director Number of Meetings Attended Number of Meetings Eligible to Attend 1 1 1 1 1 1 Substantial Shareholdings The Company has been informed that, in addition to the interests of the Directors, at 31 December 2014 and at the date of this report, the following shareholders own 3% or more beneficial interest, either direct or indirect, of the issued share capital of the Company, which is considered significant for disclosure purposes in the annual financial statements: Percentage of issued share capital 21/05/2015 * * Sun Mining Limited Metal Tiger plc 31/12/14 * 3.65% 31/12/13 4.20% - * Beneficial interest decreased to below 3%, and thus ceased to be a significant shareholder under the regulatory rules. Subsidiary Undertakings Details of the Company’s subsidiary undertakings are set out in Note 18 to the annual financial statements. Political Donations During the period, the Group made no charitable or political contributions (2013: £ nil). 9 KIBO Mining PLC Annual Report and accounts 2014 9 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Going Concern The Directors have reviewed budgets, projected cash flows and other relevant information, and on the basis of this review, are confident that the Company and the Group will have adequate financial resources to continue in operational existence for the foreseeable future. Additionally significant capital-raising subsequent to year end has provided further cash resources in order to ensure prospecting activities are continued as planned without interruption. For additional information of capital-raising subsequent to year end refer to material post balance sheet events disclosed in Note 21 to the annual financial statements. The future of the Company and the Group is dependent on the successful future outcome of its short and medium term ability to raise new equity funding and the successful development of its exploration interests and of the availability of further funding to bring these interests to production. The Directors consider that in preparing the financial statements they have taken into account all information that could reasonably be expected to be available. Consequently, they consider that it is appropriate to prepare the financial statements on the going concern basis. Environmental responsibility The Company recognises that its activities require it to have regard to the potential impact that it, its subsidiaries and partners may have on the environment. Where exploration and development works are carried out, care is taken to limit the amount of disturbance and where any remediation works are required they are carried out as and when required. Dividends There have been no dividends declared or paid during the current financial period (2013: £ nil). Corporate Governance Policy The Board is aware of the importance to conform to its statutory responsibilities and industry good practice in relation to corporate governance of the Group. The Board is accountable to the shareholders for delivery of sustained value growth. In order to support its duties and responsibilities the Board implements control procedures that assess and manage risk and ensure robust financial and operational management within the Company. The principal risks that the Company is exposed to can be classified under the general headings of exploration risk, commodity risk, price risk, currency risk and political risk. The Board also sets the Company’s core values and ethical standards of business conduct ensuring these are effectively communicated to all staff and are monitored continuously by the Board. The Board sets the Company’s strategy and monitors its implementation through management and financial performance reviews. It also works to ensure that adequate resources are available to implement strategy in a timely manner. The Company subscribes to the values of good corporate governance at all levels and is committed to conduct business with discipline, integrity and social responsibility. The Board of Directors is firmly committed to promoting Kibo Mining Plc’s adherence to the principles contained in the International Code of Good Corporate Practices. The Code is constantly being reviewed and the Directors are implementing the Code in a phased manner. The Directors are committed to the implementation of the principles and non-compliance is limited to the matter listed in this report. Role of Directors All Board members ensure that appropriate governance procedures are adhered to and there is a clear division of responsibilities at Board level to ensure a balance of power and authority so that no one individual has unfettered powers of decision making. The role of Chairman and Chief Executive Officer are not held by the same Director. The chairman is a non-executive Director. Board and Audit Committee meetings have been taking place periodically and the executive Directors manage the daily Company operations with the Board meetings taking place on a regular basis throughout the financial period. During the current reporting period the Board met 14 (fourteen) times and provided pertinent information to the Executive Committee of the Company. KIBO Mining PLC Annual Report and accounts 2014 10 10 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 The Board is responsible for effective control over the affairs of the Company, including: strategic and policy decision-making financial control, risk management, communication with stakeholders, internal controls and the asset management process. Although there was no specific committee tasked with identifying, analysing and reporting on risk during the financial period, this was nevertheless part of the everyday function of the Directors and was managed at Board level. Directors are entitled, in consultation with the Chairman to seek independent professional advice about the affairs of the Company, at the Company’s expense. Audit Committee The members of the audit committee at 26 May 2015 are Christian Schaffalitzky, Lukas Maree and Wenzel Kerremans. The audit committee has set out its roles and responsibilities within its charter and ensured that it is aligned to good financial governance principles. These include: the establishment of an Audit Committee to guide the audit approach, as well as its modus operandi and the rules that govern the audit relationship; assess the processes relating to and the results emanating from the Group’s risk and control environment; monitoring the integrity of the group’s integrated reporting and all factors and risks that may impact on reporting; annually reviewing the expertise, appropriateness and experience of the finance function; annually nominating the external auditors for appointment by the shareholders; reviewing developments in governance and best practice; foster and improve open communication and contact with relevant stakeholders of the Group; and assessing the external auditor’s independence and determining their remuneration. The audit committee further sets the principles for recommending the external auditors for non-audit services use. The audit committee has satisfied itself of the suitability of the chief financial officer, and that the chief financial officer holds the necessary expertise and has the relevant experience. The committee only met once during the current year as there was no need to review its strategy. Remuneration Committee The members of the remuneration committee at 26 May 2015 are Christian Schaffalitzky, Wenzel Kerremans and Lukas Maree. The purpose of the remuneration committee is to discharge the responsibilities of the board relating to all compensation, including equity compensation of the company’s executives. The remuneration committee establishes and administers the Company’s executive remuneration with the broad objective of aligning executive remuneration with Company performance and shareholder interests, setting remuneration standards aimed at attracting, retaining and motivating the executive team, linking individual pay with operational and Company performance in relation to strategic objectives; and evaluating compensation of executives including approval of salary, equity and incentive-based awards. The committee is empowered by the Board to set short, medium and long-term remuneration for the executive Directors. More generally, the committee is responsible for the assessment and approval of a Board remuneration strategy for the Group. The committee only met once during the current year as there was no need to review its strategy. 11 KIBO Mining PLC Annual Report and accounts 2014 11 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Governance Committee The members of the governance committee at 26 May 2015 are Christian Schaffalitzky, Lukas Maree and Wenzel Kerremans. The committee only met once during the current year as there was no need to review its strategy. The Governance Committee has set out its roles and responsibilities within its charter and ensured that it is aligned to good financial governance principles. These include: monitor the compliance of the Group with legal requirements and the Group’s Code of Ethics; and monitoring the integrity of the group’s integrated reporting and all factors and risks that may impact on reporting. Internal Audit The Company does not have an internal audit function. Currently the operations of the Group do not warrant an internal audit function, however the Board is assessing the need to establish an internal audit department considering future prospects as the Group’s operations increase. During the period the Board has taken responsibility to ensure effective governance, risk management and that the internal control environment is maintained. Health, Safety and Environmental Policy The Group is committed to high standards of Health, Safety and Environmental performance across our business. Our goal is to protect people, minimize harm to the environment, integrate biodiversity considerations and reduce disruption to our neighbouring communities. We seek to achieve continuous improvement in our Health, Safety and Environmental performance. Corporate Social Responsibility Policy (CSR) The Group’s policy is to conduct all our business operations to best industry standards and to behave in a socially responsible manner. Our goal is to behave ethically and with integrity and to respect cultural, national and religious diversity. Governance of IT The Board is responsible for IT governance as an integral part of the Group’s governance as a whole. The IT function is not expected to significantly change in the foreseeable future. The Board has the required policies and procedures in place to ensure governance of IT is adhered to. Integrated and Sustainability Reporting Integrated Reporting is defined as a “holistic and integrated representation of the Group’s performance in terms of both its finances and its sustainability”. The Group currently does not have a separate integrated report. The Board and it’s sub-committees are in the process of assessing the principles and practices of integrated reporting and sustainability reporting to ensure that adequate information about the operations of the Group, the sustainability issues pertinent to its business, the financial results and the results of its operations and cash flows are disclosed in a single report. KIBO Mining PLC Annual Report and accounts 2014 12 12 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Statement of Directors Responsibility The Directors are responsible for preparing the Group and Company financial statements in accordance with applicable Laws and Regulations. Company law requires the Directors to prepare Group and parent Company financial statements for each financial period. As permitted by Company law, the Directors have prepared the Group financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU IFRS) and have elected to prepare the Company financial statements in accordance with International Financial Reporting Standards (IFRSs) as adopted by the European Union (EU IFRS), as applied in accordance with the provisions of the Irish Companies Acts, 1963 to 2014 (‘the Companies Acts’). The Group and Company financial statements are required by law and EU IFRS to present fairly the financial position and performance of the Group. The Companies Acts provide in relation to such financial statements that reference in the relevant parts of the Acts to financial statements giving a true and fair view are references to their achieving a fair presentation. In preparing each of the Group and Company financial statements, the Directors are required to: select suitable accounting policies and apply them consistently; make judgements and estimates that are reasonable and prudent; state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; and prepare the financial statements on the going concern basis unless it is inappropriate to presume that the Group and Company will continue in business. The Directors confirm they have complied with the above requirements in preparing these accounts. Under applicable law the Directors are also responsible for preparing a Directors’ Report and reports relating to Directors’ remuneration and corporate governance that comply with that law and those rules. The Directors are responsible for keeping proper books of account which disclose with reasonable accuracy at any time the financial position of the Company and which enable them to ensure that its financial statements are prepared in accordance with International Financial Reporting Standards, and comply with the Companies Acts, 1963 to 2014, and European Communities (Companies: Group Accounts) Regulations 1992 and all regulations to be construed as one with those acts. They are also responsible for taking such steps as are reasonably open to them to safeguard the assets of the Group and Company and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. The Directors are responsible for the maintenance and integrity of the corporate and financial information included on the Company’s website. Legislation in the Republic of Ireland governing the preparation and dissemination of financial statements may differ from legislation in other jurisdictions. Corporate Governance The Directors are committed to maintaining the highest standards of corporate governance commensurate with the size, stage of development and financial status of the Group. The Board The Board is responsible for the supervision and control of the Company and is accountable to the shareholders. The Board has reserved decision-making on a variety of matters, including determining strategy for the Group, reviewing and monitoring executive management performance and monitoring risks and controls. The Board has 6 (six) Directors, comprising 3 (three) executive Directors and 3 (three) non-executive Directors. The Board met formally on 14 (fourteen) occasions during the year ended 31 December 2014. An agenda and supporting documentation was circulated in advance of each meeting. All the Directors bring independent judgement to bear on issues affecting the Group and all have full and timely access to information necessary to enable them to discharge their duties. The Directors have a wide and varying array of experiences in the industry. 13 KIBO Mining PLC Annual Report and accounts 2014 13 KIBO MINING PLC DIRECTORS’ REPORT ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Books of account The measures taken by the Directors to ensure compliance with the requirements in Section 202 of the Companies Act 1990, regarding proper books of account are the implementation of necessary policies and procedures for recording transactions, the employment of competent accounting personnel with appropriate expertise and the provision of adequate resources to the financial function. The books of account of the Company are maintained at Kolonakiou, 37, Linopetra, P.C. 4103, Limmasol – Kibo Mining Cyprus Ltd. Auditors The auditors, Saffery Champness, have been appointed as the auditors of the Company, and have indicated their willingness to continue in office in accordance with Section 160(2) of the Companies Act, 1963. On behalf of the Board ________________________ Director Date: 26 May 2015 KIBO Mining PLC Annual Report and accounts 2014 14 ________________________ Director Date: 26 May 2015 14 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS We have audited the Group and Company financial statements of Kibo Mining plc for the year ended 31 December 2014 which comprise the Consolidated Statement of Comprehensive Income, Consolidated Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows, Company Statement of Cash Flows, Summary of Significant Accounting Policies and the related notes on pages 30 to 49. The financial reporting framework that has been applied in their preparations is Irish Law and International Financial Reporting Standards ("IFRS") as adopted by the European Union. This report is made solely to the company's members, as a body, in accordance with Section 193 of the Companies Act 1990. Our audit work has been undertaken so that we might state to the company's members those matters we are required to state to them in an Auditors' Report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's members as a body, for our audit work, for this report, or for the opinions we have formed. Respective responsibilities of directors and auditors As explained more fully in the Directors' Responsibilities Statement, the directors are responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view. Our responsibility is to audit and express an opinion on the financial statements in accordance with applicable law and International Standards on Auditing (UK and Ireland). Those standards require us to comply with the Auditing Practices Board’s Ethical Standards for Auditors. Scope of the audit of the financial statements An audit involves obtaining evidence about the amounts and disclosures in the financial statements sufficient to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or error. This includes an assessment of: whether the accounting policies are appropriate to the Group and company's circumstances and have been consistently applied and adequately disclosed; the reasonableness of significant accounting estimates made by the directors; and the overall presentation of the financial statements. In addition, we read all the financial and non-financial information in the Annual Report to identify material inconsistencies with the audited financial statements and to identify any information that is apparently materially incorrect based on, or materially inconsistent with, the knowledge acquired by us in the course of performing the audit. If we become aware of any apparent material misstatements or inconsistencies we consider the implications for our report. Opinion on financial statements In our opinion: the Group financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union, of the state of the Group's affairs as at 31 December 2014 and of its profit for the year then ended; the Company financial statements give a true and fair view, in accordance with IFRSs as adopted by the European Union and as applied in accordance with the provisions of the Companies Acts 1963 to 2014, of the state of the Company's affairs as at 31 December 2014; and the financial statements have been properly prepared in accordance with the requirements of the Companies Acts 1963 to 2014 and all regulations to be construed as one with those acts. Emphasis of Matter – Realisation of Assets In forming our opinion on the financial statements, which is not modified, we considered the adequacy of disclosures made in Notes 10, 12 and 18 to the financial statements concerning the valuation of intangible assets, and investments in Group undertakings. The realisation of intangible assets of £14,413,865 (2013: £9,718,509), amounts due from Group undertakings of £26,047,465 (2013: £25,286,099) and investments in Group undertakings of £1,700,000 (2013: £1,700,000 ) included in the Company Statement of Financial Position are dependent on the discovery of economic reserves including the ability of the Group to raise sufficient finance to develop the projects. 15 KIBO Mining PLC Annual Report and accounts 2014 15 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 INDEPENDENT AUDITORS REPORT TO THE SHAREHOLDERS Matters on which we are required to report by the Companies Acts 1963 to 2014 We have obtained all the information and explanations which we consider necessary for the purposes of our audit. In our opinion proper books of account have been kept by the Company. The Company Statement of Financial Position is in agreement with the books of account. In our opinion the information given in the Directors' Report is consistent with the financial statements. The net assets of the Company, as stated in the Company Statement of Financial Position, are more than half of the amount of its called-up share capital and, in our opinion, on that basis there did not exist at 31 December 2014 a financial situation which under section 40(1) of the Companies (Amendment) Act 1983 would require the convening of an Extraordinary General Meeting of the Company. Matters on which we are required to report by exception We have nothing to report in respect of the provisions in the Companies Acts 1963 to 2014 which require us to report to you if, in our opinion, the disclosures of directors' remuneration and transactions specified by law are not made. Richard Collis Statutory auditor for and on behalf of Saffery Champness Saffery Champness Lion House Red Lion Street London WC1R 4GB Date: 26 May 2015 KIBO Mining PLC Annual Report and accounts 2014 16 16 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME All figures are stated in Sterling Continuing operations Administrative expenses Net reversal of impairment/ (Impairment) of assets Exploration expenditure Note 10/11 GROUP 31 December 31 December 2014 2013 Audited £ (1,500,757) 4,695,356 (1,073,022) Audited £ (600,832) (14,790,675) (1,358,664) Operating profit/(loss) Investment and other income 2 2,121,577 3,427 2,125,004 (16,750,171) 1,166,834 Taxation Profit/ (Loss) for the period 6 2,125,004 (15,583,337) (513,201) Profit/(Loss) on ordinary activities before tax 3 (15,583,337) Other comprehensive gain/(loss): Exchange differences on translation of foreign operations Total comprehensive profit/ (loss) for the period 193,550 2,318,554 (16,096,538) Profit/(Loss) for the period attributable to the owners of the parent 2,125,004 (15,583,337) Total comprehensive Profit/(Loss) attributable to the owners of the parent 2,318,554 (16,096,538) 0.01 0.01 (0.14) (0.14) Earnings/ (Loss) Per Share Basic earnings/ (loss) per share Diluted earnings/ (loss) per share 8 8 All activities derive from continuing operations. All profits and total comprehensive profit for the period are attributable to the owners of the Company. The Group has no recognised gains or losses other than those dealt with in the Statement of Comprehensive Income. The accompanying notes on pages 30 - 49 form an integral part of these financial statements. The financial statements were approved by the Board of Directors on 26 May 2015 and signed on its behalf by: On behalf of the Board ________________________ Director Date: ________________________ Director Date: 17 KIBO Mining PLC Annual Report and accounts 2014 17 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 CONSOLIDATED STATEMENT OF FINANCIAL POSITION GROUP All figures are stated in Sterling Note Assets Non-Current Assets Property, plant and equipment Intangible assets 31 December 31 December 2014 2013 Audited Audited £ £ 3,761 14,413,865 Total non-current assets 9 10 Current Assets Trade and other receivables Cash and cash equivalents 12 13 11,557 186,447 Total current assets Total Assets Equity and Liabilities Equity Called up share capital Share premium account Share based payment reserve Translation reserve Retained deficit 14 14 15 16 Total Equity Liabilities Current Liabilities Trade and other payables Current tax liabilities 17 17 Total Current Liabilities Total Equity and Liabilities 14,417,626 6,326 9,718,509 9,724,835 198,004 51,200 443,763 14,615,630 10,219,798 12,591,750 23,903,307 510,978 (400,985) (22,229,526) 14,375,524 10,998,282 23,398,853 977,543 (594,535) (24,821,095) 9,959,048 14,375,524 9,959,048 240,106 - 228,391 32,359 240,106 14,615,630 The accompanying notes on pages 30 - 49 form an integral part of these financial statements. 494,963 260,750 10,219,798 The financial statements were approved by the Board of Directors on 26 May 2015 and signed on its behalf by: On behalf of the Board ________________________ Director Date: ________________________ Director Date: KIBO Mining PLC Annual Report and accounts 2014 18 18 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 COMPANY STATEMENT OF FINANCIAL POSITION Company All figures are stated in Sterling Non-Current Assets Investments in group undertakings Trade and other receivables Total Non- current assets 18 12 Current Assets Trade and other receivables Cash and cash equivalents 12 13 Total Current assets 31 December 2014 Audited £ Total liabilities Total Equity and Liabilities 27,747,465 26,986,099 659 79,575 50,087 31,949 27,827,699 27,068,135 12,591,750 23,903,307 510,978 39,321 (9,271,325) 27,774,031 10,998,282 23,398,853 510,978 27,762 (7,928,130) 27,007,745 27,774,031 27,007,745 17 - 7,478 17 17 53,668 - 20,552 32,360 Total Equity Current Liabilities Trade and other payables Current tax liabilities 1,700,000 25,286,099 82,036 14 14 15 16 Liabilities Non -Current Liabilities Trade and other payables 1,700,000 26,047,465 80,234 Total Assets Equity and Liabilities Equity Called up share capital Share premium Share based payment reserve Translation reserves Retained deficit 31 December 2013 Audited £ 53,668 27,827,699 60,390 27,068,135 The accompanying notes on pages 30 - 49 form integral part of these financial statements. The financial statements were approved by the Board of Directors on 26 May 2015 and signed on its behalf by: On behalf of the Board ________________________ Director Date: ________________________ Director Date: 19 KIBO Mining PLC Annual Report and accounts 2014 19 - 14 12,591,750 1,593,468 1,593,468 - 1,806,236 1,806,236 10,998,282 - 9,192,046 - £ - 14 2,097,922 2,097,922 36,495,057 23,903,307 504,454 504,454 - 1,519,105 3,325,341 1,519,105 3,325,341 23,398,853 34,397,135 - £ Total share capital 21,879,748 31,071,794 - £ Share premium ________________________ Director Date: 3 KIBO Mining PLC Annual Report and accounts 2014 ________________________ Director Date: On behalf of the Board 20 20 15 510,978 (466,565) (466,565) 977,543 - 977,543 - £ Share based payment reserve 16 193,550 (400,985) - (513,201) (594,535) 193,550 (81,334) (513,201) £ Foreign currency translation reserve £ Total 466,565 2,591,569 (273,015) 109,993 (22,229,526) (466,565) 14,375,524 2,097,922 4,416,476 - (9,237,758) 22,730,245 (15,583,337) (15,583,337) (513,201) £ Retained deficit 3,325,341 (513,201) (15,583,337) (12,771,197) 383,008 (24,821,095) 9,959,048 2,125,004 2,125,004 193,550 193,550 896,209 (513,201) £ Total reserves ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 The financial statements were approved by the Board of Directors on 26 May 2015 and signed on its behalf by The notes on pages 30 - 49 form part of the financial statements. Note Balance at 31 December 2014 Balance as at 31 December 2013 Profit / (loss) for the year Other comprehensive income (loss) - exchange differences on translating foreign operations Reclassification of share based payment reserve on expired share options issued Proceeds of share issue of share capital Balance as at 1 January 2013 Profit /(loss) for the year Other comprehensive income (loss) - exchange differences on translating foreign operations Proceeds of share issue of share capital All figures are stated in Sterling GROUP Share Capital CONSOLIDATED STATEMENT OF CHANGES IN EQUITY KIBO MINING PLC 14 1,593,468 1,593,468 12,591,750 1,806,236 1,806,236 10,998,282 - 9,192,046 - £ 14 504,454 504,454 23,903,307 1,519,105 1,519,105 23,398,853 - 21,879,748 - £ Share premium 2,097,922 2,097,922 36,495,057 3,325,341 3,325,341 34,397,135 - 31,071,794 - £ ________________________ Director Date: 3 KIBO Mining PLC Annual Report and accounts 2014 ________________________ Director Date: On behalf of the Board 21 21 The financial statements were approved by the Board of Directors on 26 May 2015 and signed on its behalf by 15 510,978 510,978 - 510,978 - £ Share based payment reserve 11,559 39,321 47,516 27,762 11,559 (19,754) 47,516 £ Foreign currency translation reserve 11,559 550,299 47,516 538,740 11,559 491,224 47,516 £ Total reserves (1,343,195) (9,271,325) (3,737,739) (7,928,130) (1,343,195) - (4,190,391) (3,737,739) - £ Retained deficit 2,097,922 766,286 27,774,031 3,325,341 (364,882) 27,007,745 (1,343,195) 11,559 27,372,627 (3,737,739) 47,516 £ Total equity ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 Total share capital The accompanying notes on pages 30 - 49 form an integral part of these financial statements. Note Balance at 31 December 2014 Balance at 31 December 2013 Profit / (loss) for the year Other comprehensive income (loss) - exchange differences on translating foreign operations Proceeds of issue of share capital Balance at 1 January 2013 Profit / (loss) for the year Other comprehensive income (loss) - exchange differences on translating foreign operations Proceeds of issue of share capital Share options issued All figures are stated in Sterling COMPANY Share capital COMPANY STATEMENT OF CHANGES IN EQUITY KIBO MINING PLC KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 CONSOLIDATED STATEMENT OF CASH FLOWS All figures are stated in Sterling GROUP 31 December 31 December 2014 2013 Audited Audited Notes £ £ Cash flows from operating activities Profit/ (Loss) for the period before taxation Adjustments for: Foreign exchange loss/ (gain) Property, plant and equipment non-cash movement Investment income (Reversal of impairment)/ Impairment of assets 2,125,004 193,550 2,565 (3,427) (4,695,356) (2,377,664) Movement in working capital Decrease in debtors Decrease in creditors Net cash outflows from operating activities (15,583,337) (513,246) 4,618 (604) 14,790,675 (1,301,894) 39,643 (20,644) 18,999 (2,358,665) 24,238 (1,556,146) (1,531,908) (2,833,802) 2,097,922 3,427 2,101,349 3,325,341 604 3,325,945 - (146,814) (244) (147,058) (257,316) 443,763 345,085 98,678 Cash flows from financing activities Proceeds of issue of share capital Investment income Net cash proceeds from financing activities Cash flows from investing activities Acquisition of subsidiaries Purchase of property, plant and equipment Net cash used in investing activities Net (decrease)/ increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period 186,447 The accompanying notes on pages 30 - 49 form an integral part of these financial statements. 22 KIBO Mining PLC Annual Report and accounts 2014 22 443,763 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FINANCIAL FOR THE STATEMENTS YEAR ENDEDAT 3131 DECEMBER DECEMBER 2014 2013 COMPANY STATEMENT OF CASH FLOWS All figures are stated in Sterling COMPANY 31 December 31 December 2014 2013 Audited Audited Notes £ £ Cash flows from operating activities Loss for the period before taxation Adjusted for: Foreign exchange gain Impairment of investments in subsidiary undertakings Movement in working capital Decrease/(Increase) in debtors Increase/(Decrease) in creditors Net cash outflows from operating activities (1,343,195) 11,559 (1,331,636) (3,737,739) 47,516 4,114,026 423,803 49,428 (6,722) 42,706 (1,288,930) (2,311,035) (1,422,389) (3,733,424) (3,309,621) 2,097,922 2,097,922 3,325,341 3,325,341 (761,366) (761,366) - Cash flows from financing activities Proceeds of issue of share capital Net cash proceeds from financing activities Cash flows from investing activities Cash advances to Group Companies Net cash used in investing activities Net increase in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of the period 47,626 31,949 79,575 15,720 16,229 31,949 The accompanying notes on pages 30 - 49 form an integral part of these financial statements. 23 23 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES General Information Kibo Mining Plc (“the Company”) is a Company incorporated in Ireland. The Group financial statements consolidate those of the Company and its subsidiaries (together referred to as the “Group”). The principal activities of the Company and its subsidiaries are related to the exploration for and development of coal and other minerals in Tanzania. The figures in the financial statements are presented in Sterling unless otherwise stated. This summary forms part of the notes to the financial statements. Statement of Compliance As permitted by the European Union, the Group financial statements have been prepared in accordance with International Financial Reporting Standards (IFRSs) and their interpretations issued by the International Accounting Standards Board (IASB) as adopted by the EU (IFRS). The individual financial statements of the Company (“Company financial statements”) have been prepared in accordance with the Companies Act, 1963 to 2014 which permits a Company that publishes its Company and Group financial statements together, to take advantage of the exemption in Section 148(8) of the Companies Act, 1963, from presenting to its members its Company Income Statement and related notes that form part of the approved Company financial statements. The IFRSs adopted by the EU as applied by the Company and the Group in the preparation of these financial statements are those that were effective at 31 December 2014. Statement of Accounting Policies The accounting policies set out below have been applied consistently to all periods presented in these consolidated financial statements. Basis of Preparation The Group and Company financial statements are prepared on the historical cost basis. The accounting policies have been applied consistently by Group entities. The Group and Company financial statements have been prepared on a going concern basis as explained on page 9. Use of Estimates and Judgements The preparation of financial statements in conformity with EU IFRS requires management to make judgements, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. The estimates and associated assumptions are based on historical experience and various other factors that are believed to be reasonable under the circumstances, the results of which form the basis of making judgements about carrying values of assets and liabilities that are not readily apparent from other sources. In particular, there are significant areas of estimation, uncertainty and critical judgements in applying accounting policies that have the most significant effect on the amounts recognised in the financial statements in the following areas: Measurement of the recoverable amounts of intangible assets; Recoverability of group loans in the parent Company: and Utilisation of tax losses Exploration and evaluation expenditure The Group’s accounting policy for exploration and evaluation expenditure results in the capitalisation of certain intangible mineral resources which are identified through business combinations or equivalent acquisitions. This policy requires management to make certain estimates and assumptions as to future events and circumstances, in particular whether an economically viable extraction operation can be established based on the separately identified mineral resources. Any such estimates and assumptions may change as new information becomes available. If, after having capitalised the intangible mineral resources under the policy, a judgement is made that recovery of the intangible asset is unlikely, the relevant capitalised amount will be written off to the income statement. Recoverability of group loans in the parent Company The realisation of amounts due from Group undertakings is dependent on the discovery of economic reserves including the ability of the Group to raise sufficient finance to develop the projects in order to settle the group loan balance receivable. 24 KIBO Mining PLC Annual Report and accounts 2014 24 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Taxation Assessing the recoverability of deferred income tax assets requires the Company to make significant estimates related to expectations of future taxable income. Estimates of future taxable income are based on forecast cash flows from operations and the application of existing tax laws in each jurisdiction. To the extent that future cash flows and taxable income differ significantly from estimates, the ability of the Company to realise the net deferred tax assets recorded at the end of the reporting period could be impacted. Revenue Recognition - Interest Revenue Interest revenue is accrued on a time basis, by reference to the principal outstanding and at the effective interest rate applicable, which is the rate that exactly discounts estimated future cash receipts through the expected life of the financial asset to that asset’s net carrying amount. Consolidation The consolidated financial statements comprise the financial statements of Kibo Mining Plc and its subsidiaries for the year ended 31 December 2014, over which the Company has control. Control is achieved when the Company: has the power over the investee; is exposed , or has rights, to variance return from its involvement with the investee; and has the ability to use its power to affect its returns. The Company reassesses whether or not it controls and investee if facts are circumstance indicate the there are changes to one or more of the three elements of control listed above. In assessing control, potential voting rights that are currently exercisable or convertible are taken into account. Subsidiaries are fully consolidated from the date that control commences until the date that control ceases. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Intragroup balances and any unrealised gains or losses or income or expenses arising from intragroup transactions are eliminated in preparing the Group financial statements, except to the extent they provide evidence of impairment. The Group accounts for business combinations using the acquisition method of accounting. The cost of the business combination is measured as the aggregate of the fair values of assets given, liabilities incurred or assumed and equity instruments issued. Costs directly attributable to the business combination are expensed as incurred, except the costs to issue debt which are amortised as part of the effective interest and costs to issue equity which are included in equity. The acquiree's identifiable assets, liabilities and contingent liabilities which meet the recognition conditions of IFRS 3 Business Combinations are recognised at their fair values at acquisition date. Contingent liabilities are only included in the identifiable assets and liabilities of the acquiree where there is a present obligation at acquisition date. Non-controlling interest arising from a business combination is measured either at their share of the fair value of the assets and liabilities of the acquiree or at fair value. The treatment is not an accounting policy choice but is selected for each individual business combination, and disclosed in the note for business combinations. Changes in the Group’s interest in subsidiaries that do not result in a loss of control are accounted for as equity transactions. Goodwill Goodwill arising from the acquisition of a subsidiary represents the excess of the cost of the acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities and contingent liabilities of the subsidiary 25 25 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES recognised at the date of acquisition. Goodwill is initially measured at cost and is subsequently measured at cost less any accumulated impairment losses. Goodwill is tested for impairment on an annual basis. Intangible Assets Intangible assets comprise the acquisition of rights to explore in relation to the Group’s exploration and evaluation activities. Intangible assets are carried at cost less accumulated amortisation and impairment. Irrespective of whether there is any indication of impairment, the Group also tests intangible assets with an indefinite useful life or intangible assets not yet available for use for impairment annually by comparing its carrying amount with its recoverable amount. This impairment test is performed during the annual period and at the same time every period. Exploration & Evaluation Assets Exploration and evaluation activity involves the search for mineral resources, the determination of technical feasibility and the assessment of commercial viability of an identified resource. Exploration and evaluation activity includes: • researching and analysing historical exploration data; • gathering exploration data through topographical, geochemical and geophysical studies; • exploratory drilling, trenching and sampling; • determining and examining the volume and grade of the resource; • surveying transportation and infrastructure requirements; and • conducting market and finance studies. Exploration and evaluation expenditure is charged to the income statement as incurred except in the following circumstances, in which case the expenditure may be capitalised: • In respect of minerals activities: – the exploration and evaluation activity is within an area of interest which was previously acquired as an asset acquisition or in a business combination and measured at fair value on acquisition; or – the existence of a commercially viable mineral deposit has been established. Capitalised exploration and evaluation expenditure considered to be tangible is recorded as a component of property, plant and equipment at cost less impairment charges. Otherwise, it is recorded as an intangible. Intangible assets all relate to exploration and evaluation expenditure which are carried at cost with an indefinite useful life and therefore are reviewed for impairment annually and when there are indicators of impairment. Where a potential impairment is indicated, assessment is performed for each area of interest in conjunction with the group of operating assets (representing a cash generating unit) to which the exploration is attributed. Exploration areas at which reserves have been discovered but require major capital expenditure before production can begin, are continually evaluated to ensure that commercial quantities of reserves exist or to ensure that additional exploration work is under way or planned. Impairment Assets are reviewed for impairment at each reporting date or whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised for the amount by which the asset’s carrying amount exceeds its recoverable amount. The recoverable amount is the higher of an asset’s fair value less costs to sell and value in use. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash flows (cash generating units). If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying amount, the carrying amount of the asset (cash-generating unit) is reduced to its recoverable amount. An impairment loss is recognised in the Statement of Comprehensive Income immediately. Property, Plant and Equipment Property, Plant and Equipment are stated at cost or valuation, less accumulated depreciation. Depreciation is provided at rates calculated to write off the cost less residual value of each asset over its expected useful life, as follows: 26 KIBO Mining PLC Annual Report and accounts 2014 26 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Office equipment-between 12.5% to 37.5% straight line; Plant & machinery at 20% straight line; Furniture & fixtures at 12.5% straight line; Motor vehicles at 25% straight line; and I.T Equipment at 20% straight line The residual value and useful lives of the property, plant and equipment are reviewed annually and adjusted if appropriate at each Statement of Financial Position date. On disposal of property, plant and equipment the cost and the related accumulated depreciation and impairments are removed from the financial statements and the net amount, less any proceeds, is taken to the Statement of Comprehensive Income. Income Tax Income tax expense comprises current and deferred tax. Income tax expense is recognised in the Income Statement except to the extent that it relates to items recognised directly in equity, in which case it is recognised in equity. Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Deferred tax is recognised using the balance sheet method, providing for temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit, and differences relating to investments in subsidiaries to the extent that they probably will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to the temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date. A deferred tax asset is recognised to the extent that it is probable that future taxable profits will be available against which temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised. Additional income taxes that arise from the distribution of dividends are recognised at the same time as the liability to pay the related dividend is recognised. Foreign Currencies Functional and presentation currency Items included in the financial statements of each of the Group’s entities are measured using the currency of the primary economic environment in which the entity operates (“the functional currency”). The consolidated financial statements are presented in Sterling, which is the Group’s presentation currency. This is also the functional currency of the Group and Company and is considered by the Board also to be appropriate for the purposes of preparing the Group financial statements. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates prevailing at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at period end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income. Group companies The results and financial position of all the Group entities (none of which has the currency of a hyperinflationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: Monetary assets and liabilities for each Statement of Financial Position presented are presented at the closing rate at the date of that Statement of Financial Position. Non-monetary items are measured at the exchange rate in effect at the historical transaction date and are not translated at each Statement of Financial Position date; 27 27 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Income and expenses for each income statement are translated at average exchange rates (unless this average is not a reasonable approximation of the cumulative effect of the rates prevailing on the transaction dates, in which case income and expenses are translated at the dates of the transaction): and All resulting exchange differences are recognised as a separate component of equity. On consolidation, exchange differences arising from the translation of monetary items receivable from foreign subsidiaries for which settlement is neither planned nor likely to occur in the foreseeable future are taken to shareholders equity. When a foreign operation is sold, such exchange differences are recognised in the income statement as part of the gain or loss on sale. Issue Expenses and Share Premium Account Issue expenses are written off against the premium arising on the issue of share capital. Earnings per Share The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. Basic EPS is calculated by dividing the profit or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period. Diluted EPS is determined by adjusting the profit or loss attributable to ordinary shareholders and the weighted average number of ordinary shares outstanding for the effects of all dilutive potential ordinary shares. Financial Instruments Cash and Cash Equivalents Cash and Cash Equivalents in the Statement of Financial Position comprise cash at bank and in hand and short term deposits with an original maturity of three months or less. Bank overdrafts that are repayable on demand and form part of the Group’s cash management are included as a component of cash and cash equivalents for the purpose of the statement of cash flows. Trade and other receivables / payables Trade and other receivables and payables are stated at cost less impairment, which approximates fair value given the short dated nature of these assets and liabilities. Shareholder warrants The shareholder warrants entitle shareholders to a number of common shares based upon the number of shares they subscribed for at the date of issue of the warrant instrument. The warrants relate to a transaction with the equity holders as opposed to a transaction in exchange for any goods or services. The equity component of the instrument is not considered material and there is no liability component arising as a result of these warrants. Upon exercise of the warrant the proceeds received, net of attributable transaction costs, are credited to share capital and where appropriate share premium. Share based payments For such grants of share options, the fair value as at the date of grant is calculated using the Black-Scholes option pricing model, taking into account the terms and conditions upon which the options were granted. The amount recognised as an expense is adjusted to reflect the actual number of share options that are likely to vest, except where forfeiture is only due to market based conditions not achieving the threshold for vesting. Share Capital Incremental costs directly attributable to the issue of ordinary shares and share options are recognised directly in equity. 28 KIBO Mining PLC Annual Report and accounts 2014 28 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES NEW STANDARDS AND INTERPRETATIONS Adoption of new and revised standards During the financial year, there were no new IFRSs or IFRIC interpretations, that are effective for the first time, that have had a material impact on the group. The following pronouncements have been adopted in the year and either had no impact on the financial statements or resulted in changes to presentation and disclosure only: Standard Effective date, annual period beginning on or after Amendments to IFRS 10, IFRS 12 and IAS 27: Investment Entities 1 January 2014 IFRS 10 Consolidated financial statements 1 January 2013* IFRS 11 Joint arrangements 1 January 2013* IFRS 12 Disclosure of interests in other entities 1 January 2013* IAS 27 Consolidated and Separate financial statements 1 January 2013* IAS 28 Investments in Associates 1 January 2013* IAS 36 – Impairment of assets 1 January 2014 IAS 39 – Financial instruments: recognition and measurement 1 January 2014 IAS 39 – Financial instruments: recognition and measurement 1 January 2014 IFRIC 21 – Levies 1 January 2014 *Endorsed by EFRAG for accounting periods commencing on or after 1 January 2014 Standards issued but not yet effective: At the date of authorisation of these financial statements, the following Standards and Interpretations relevant to the Group, which have not been applied in these financial statements, were in issue but were not yet effective. In some cases these standards and guidance has not been endorsed by the European Union. Standard Annual Improvements 2010 – 2012 cycle Annual Improvements 2011-2013 cycle Annual Improvements 2012-2014 cycle IFRS 9 Financial instruments IFRS 10, IFRS 12 and IAS 28 Investment Entities: Applying the Consolidation Exception IFRS 11 – Joint arrangements IFRS 14 – Regulatory Deferral accounts IFRS 15 Revenue from contracts with Customers IAS 16 – Property, Plant & Equipment and IAS 38 – Intangible assets IAS 1: Presentation of Financial Statements IAS 16 – Property, Plant & Equipment and IAS 41 – Bearer Plants IAS 19 – Employee Benefits IAS 27 Consolidated and separate financial statements ** Yet to be endorsed by the EU Effective date, annual period beginning on or after 1 July 2014 1 July 2014 1 January 2016** 1 January 2018** 1 January 2016** 1 January 2016** 1 January 2016** 1 January 2017** 1 January 2016** 1 January 2016** 1 January 2016** 1 July 2014 1 January 2016** Except for IFRS 15, the directors anticipate that the adoption of these Standards and Interpretations in future periods will have no material impact on the financial statements of the Group. The potential impact of IFRS 15 is currently being evaluated. 29 29 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 1. Segment analysis IFRS 8 requires an entity to report financial and descriptive information about its reportable segments, which are operating segments or aggregations of operating segments that meet specific criteria. Operating segments are components of an entity about which separate financial information is available that is evaluated regularly by the chief operating decision maker. The Chief Executive Officer is the Chief Operating decision maker of the Group. Management currently identifies two divisions as operating segments – mining and corporate. These operating segments are monitored and strategic decisions are made based upon them together with other non-financial data collated from exploration activities. Principal activities for these operating segments are as follows: 2014 Group Administrative cost Exploration expenditure Net reversal of impairment of assets Investment and other income Tax Profit/ (Loss) after tax 2013 Group Administrative cost Exploration expenditure Impairment of assets Investment and other income Tax Profit/ (Loss) after tax 2014 Group Assets Segment assets Liabilities Segment liabilities Mining and Exploration Group (1,073,022) 4,695,356 3,427 3,625,761 Mining and Exploration Group (1,358,664) (14,790,675) 510,326 (15,639,013) Corporate Group (600,832) 656,508 55,676 31 December 2013 (£) Group (600,832) (1,358,664) (14,790,675) 1,166,834 (15,583,337) Mining Group Corporate Group 31 December 2014 (£) Group 14,417,626 198,004 14,615,630 - 240,106 240,106 2,565 - 2,565 Other Significant items Depreciation 30 KIBO Mining PLC Annual Report and accounts 2014 31 December 2014 (£) Group (1,500,757) (1,073,022) 4,695,356 3,427 (2,125,004) Corporate Group (1,500,757) (1,500,757) 30 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 2013 Group Assets Segment assets Liabilities Segment liabilities Other Significant items Depreciation Mining Group Corporate Group 31 December 2013 (£) Group 9,724,835 494,963 10,219,798 - 260,750 260,750 4,618 - 4,618 Revenue from major products and services The only income that the Group received during the period related to bank interest, which has been allocated to Corporate. Geographical segments The Group operates in six principal geographical areas – Corporate [Ireland, Cyprus, South Africa, Canada & United Kingdom] and Mining [Tanzania]. Major Operational indicators Carrying value of segmented assets Loss after tax Major Operational indicators Carrying value of segmented assets Loss after tax 2. Tanzania Group Ireland, United Kingdom, South Africa, Cyprus and Canada Group 31 December 2014 (£) Group 14,417,626 3,811,986 198,004 (1,686,982) 14,615,630 2,125,004 Tanzania Group Ireland, United Kingdom, South Africa, Cyprus and Canada Group 31 December 2013 (£) 9,831,308 (15,971,470) 388,490 388,133 10,219,798 (15,583,337) 31 December 2014 (£) 31 December 2013 (£) 604 510,326 655,904 Investment and other Income Bank interest Recovery of exploration expenditure Other income (includes tax repayment) 3,427 3,427 1,166,834 Investment and other income comprises interest on surplus cash reserves held during the current period on short term basis, as well as recoveries of exploration expenditure and exchange gains through currency fluctuations. 31 31 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 3. Loss on ordinary activities before taxation Operating loss is stated after the following key transactions: 31 December 2014 (£) Group 2,565 35,000 Depreciation of property, plant and equipment of Group financial statements Auditors’ remuneration for audit of Group and Company financial statements 4. Staff costs (including Directors) Wages and salaries including social security costs Share based payments Group 31 December 2014 (£) 305,844 155,725 461,569 Group 31 December 2013 (£) 169,224 169,224 Company 31 December 2014 (£) 167,639 155,725 323,364 31 December 2013 (£) Group 4,618 21,000 Company 31 December 2013 (£) 5,424 The average monthly number of employees (including executive Directors) during the period was as follows: Exploration activities Administration 5. Directors’ emoluments Basic salary and fees Share based payments Group 31 December 2014 (£) 10 6 16 Group 31 December 2013 (£) 10 6 16 Company 31 December 2014 (£) 1 1 2 Group 31 December 2014 (£) 248,588 127,371 375,959 Group 31 December 2013 (£) 169,224 169,224 Company 31 December 2014 (£) 167,639 127,371 295,009 The emoluments of the Chairman were £5,804 (2013: £1,808). The emoluments of the highest paid director were £164,444 (2013: £81,900). 5,424 Company 31 December 2013 (£) 1 1 2 Company 31 December 2013 (£) 5,424 5,424 Key management personnel consist only of the Directors. Details of share options and interests in the Company’s shares of each director are shown in the Directors’ report on page 8. The following table summarises the remuneration applicable to each of the individuals who held office as a director during the reporting period: Salary and fees £ 3,442 124,275 80,949 3,442 3,442 33,038 248,588 31 December 2014 Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Lukas Maree Wenzel Kerremans Andreas Lianos Total 32 KIBO Mining PLC Annual Report and accounts 2014 32 Share based payments £ 2,362 40,169 26,094 2,362 2,362 54,021 127,371 Total £ 5,804 164,444 107,044 5,804 5,804 87,059 375,959 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Salary and Fees £ 1,808 81,900 81,900 1,808 1,808 169,224 31 December 2013 Christian Schaffalitzky Louis Coetzee Noel O’Keeffe Lukas Maree Wenzel Kerremans Total 6. Share based payments £ - Total £ 1,808 81,900 81,900 1,808 1,808 169,224 31 December 2014 (£) - 31 December 2013 (£) - Taxation Current tax Charge for the period in Ireland, Canada, Republic of South Africa, Cyprus, England and Republic of Tanzania Total tax charge - - The difference between the total current tax shown above and the amount calculated by applying the standard rate of Irish corporation tax of 12.5% to the loss before tax is as follows: 2014 (£) 2,125,004 Profit/ (Loss) from Continuing operations Income tax expense calculated at 12.5% (2013: 12.5%) Expenses that are not deductible in determining taxable profits Income which is not taxable Losses available for carry forward Income tax expense recognised in the Statement Of Comprehensive Income 265,526 (586,920) 321,394 - 2013 (£) (15,583,337) (1,947,917) 1,848,834 (77,715) 176,798 - The effective tax rate used for the December 2014 and December 2013 reconciliations above is the corporate rate of 12.5% payable by corporate entities in Ireland on taxable profits under tax law in that jurisdiction. No provision has been made for the 2014 deferred taxation as no taxable income has been received to date, and the probability of future taxable income is indicative of current market conditions which remain uncertain. At the Statement of Financial Position date, the Group had estimated unused tax losses of £13,067,784 (2013: £10,497,432 ) available for offset against future profits which equates to an estimated potential deferred tax asset of £1,633,473 (2013: £1,312,179). No deferred tax asset has been recognised due to the unpredictability of the future profit streams. Losses may be carried forward indefinitely in accordance with the applicable taxation regulations ruling within each of the above jurisdictions. 7. Loss of parent Company As permitted by Section 148(8) of the Companies Act 1963, the statement of comprehensive income of the parent Company has not been separately disclosed in these financial statements. The parent Company’s loss for the financial period was £1,343,195 (2013: £3,737,739). 33 33 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 8. Earnings/ (Loss) per share Basic earnings per share The basic earnings and weighted average number of ordinary shares used for calculation purposes comprise the following: Earnings/ (Loss) for the period attributable to equity holders of the parent Weighted average number of ordinary shares for the purposes of basic earnings per share Basic earnings/ (loss) per ordinary share 31 December 2014 (£) 2,125,004 31 December 2013 (£) (15,583,337) 193,400,160 110,593,163 0.01 (0.14) Diluted earnings/ (loss) per share As the exercise price of the share options and warrants in issue is considerably higher than the current market value as at reporting date, these option and warrants do not have a dilutive impact. Thus there are no dilutive share options or warrants in issue as at year end which decreased the basic earnings/ (loss) per share as indicated above. 0.01 Diluted earnings/ (loss) per ordinary share 34 KIBO Mining PLC Annual Report and accounts 2014 34 (0.14) KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 9. Property, plant and equipment GROUP Furniture Motor and Fittings Vehicles (£) (£) Cost Opening Cost as at 1 January 2013 Additions Disposals Exchange movements Additions Disposals Exchange movements Closing Cost as at 31 December 2014 Accumulated Depreciation (“Acc Depr”) Acc Depr as at 1 January 2013 3,254 2,389 7,263 1,867 7,277 3,190 2,586 7,121 22,041 116 448 456 (99) 1,983 (145) 7,725 Furniture Motor and Fittings Vehicles (£) (£) (64) 244 (47) Office I.T Plant & Equipment Equipment Machinery (£) (£) (£) Total 3,646 2,487 7,559 23,400 (£) 724 4,701 1,139 1,342 3,673 4,801 15,715 Acc Depr as at 31 December 2013 944 6,428 673 (74) 1,738 1,804 Disposals Depreciation Exchange movements 248 58 901 396 729 129 592 91 1,250 7,725 Furniture Motor and Fittings Vehicles (£) (£) 35 244 (436) 1,359 1,919 (192) Carrying value as at 31 December 2013 Carrying value as at 31 December 2014 (142) 22,233 438 246 (26) Carrying Value (£) 7,422 Disposals Depreciation Exchange movements Acc Depr as at 31 December 2014 Total 1,905 (38) Closing Cost as at 31 December 2013 Office I.T Plant & Equipment Equipment Machinery (£) (£) (£) 923 733 849 - 514 (52) 1,266 (138) 11,579 4,618 (482) 484 296 2,954 970 Office I.T Plant & Equipment Equipment Machinery (£) (£) (£) Total 2,596 1,452 1,050 2,487 782 - 5,581 19,639 2,320 1,978 (£) 6,326 3,761 35 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 10. Intangible assets Intangible assets consist solely of separately identifiable prospecting assets identified through business combinations, where these separately identifiable intangible assets will be recognised at fair value on acquisition date of said subsidiary. The following reconciliation serves to summarise the composition of intangible prospecting assets as at period end: Reconciliation of Intangible Assets Valuation as at 1 January 2013 Impairment of prospecting licences Reversal of impairment of licences Valuation as at 1 January 2014 Impairment of prospecting licences Reversal of impairment of licences Valuation as at 31 December 2014 Pinewood Project (£) Rukwa Coal Project (£) 1,250,000 (820,00) 430,000 (430,00) - 15,076,105 (10,516,105) 4,560,000 8,153,865 12,713,865 Lake Victoria Project (£) 1,700,000 Haneti Project (£) Total (£) 3,028,509 1,700,000 1,700,00 3,028,509 (3,028,509) - 21,054,614 (11,336,105) 9,718,509 (3,458,509) 8,153,865 14,413,865 Intangible assets are not amortised, due to the indefinite useful life which is attached to the underlying prospecting rights, until such time that active mining operations commence, which will result in the intangible asset being amortised over the useful life of the relevant mining licences. Intangible assets with an indefinite useful life are assessed for indications of impairment on an annual basis and also when there is an indication of impairment, against the prospective fair value of the intangible asset. The valuation of intangible assets with an indefinite useful life is reassessed on an annual basis through valuation techniques applicable to the nature of the intangible assets. In assessing whether a write-down is required in the carrying value of a potentially impaired intangible asset, the asset’s carrying value is compared with its recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and value in use. The valuation techniques applicable to the valuation of the abovementioned intangible assets comprise a combination of fair market values, discounted cash flow projections and historic transaction prices. The following key assumptions influence the measurement of the intangible assets recoverable amounts, through utilising the value is use method in order to determine the recoverable amount: Comparable market value of similar mineral statements; Currency fluctuations and exchange movements; Expected growth rates; Cost of capital related to funding requirements; Applicable discounts rates; Future operating expenditure for extraction and mining of measured mineral resources; and Co-operation of key project partners going forward. Through review of the project specific financial, operational, market and economic indicators applicable to the above intangible assets, impairment indicators were identified which required impairment of the intangible assets and reversal of impairments recognised in respect of selective exploration projects. Reversal of impairment Rukwa Coal Project The commencement of Stage 1, Phase 1 (Concept Study Report) of the Rukwa DMFS was announced in July 2014 with the appointment of South African consulting group Minxcon Projects (Minxcon) of South Africa to carry out the study. Based on the study, management has re-assessed the related intangible asset which indicated a reversal of impairment amounting to £8,153,865. 36 KIBO Mining PLC Annual Report and accounts 2014 36 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS The following key assumptions influence the measurement of the intangible assets recoverable amounts, through utilising the value is use method in order to determine the recoverable amount: NPV of £12 million at 15-20% discount rate. Rukwa has an all – in cost margin of between 38% and 45% that is high compared to other coal mines. A capital investment of between USD46 million and USD89 million is required to fund the operation subject to the option investigated. The life of the project is estimated to be 27 years based on the most feasible model. The information utilised for valuation of the project was based on independent Competent Persons Reports prepared specifically for the project by independent organisations to the Group. The payback period for the Project is between 3.9 and 4.7 years. The previous impairment performed was based on resource estimations and not on the net present value determination as these became available from the latest Competent Persons Reports prepared during the current financial period. Impairment Haneti Project Due to the continued focus on the advanced coal and gold developments and resulting delay in the field exploration work related to the Haneti project, management has for financial reporting purposes reassessed the value in use of the Haneti project in line with the requirements of the financial reporting framework. The result indicated a downward adjustment in order to reflect the current resource listings, not taking into account the prospective value management attaches to the Haneti. Based on the latest management assessment of the related intangible asset indicated an impairment amounting to £3,028,509. Pinewood Project Due to the continued focus on the advanced coal and gold developments and resulting delay in the field exploration work related to the Pinewood project, management has relinquished a number of the uranium and coal licences in the prior and current period in order to focus on the most favourable areas. For financial reporting purposes management has reassessed the value in use of the Pinewood project in line with the requirements of the financial reporting framework. The result indicated a downward adjustment as the value in use indicators suggest there to be limited value encased within the Pinewood project as it currently stands. Based on the latest management assessment of the related intangible asset indicated an impairment amounting to £430,000. 37 37 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 11. Business Combinations The Group did not enter into any business combinations during the current financial year. Reconciliation of Goodwill Opening balance of goodwill Goodwill created through business combinations Acquisition of the Reef Miners Ltd* Group Group 2014 (£) - 2013 (£) 3,307,757 - 146,813 - Impairment loss on mineral exploration acquisitions** (3,454,570) - * The above goodwill relates to the acquisition of the entire ordinary shareholding of Reef Miners Limited. ** Through review of the project specific financial, operational, market and economic indicators applicable to the above goodwill, impairment indicators were identified which required impairment of the goodwill recognised in respect of business combinations applicable to the above projects. 12. Trade and other receivables Group 2014 (£) Amounts falling due over one year: Amounts owed by group undertakings Amounts falling due within one year: Other debtors Group 2013 (£) Company 2014 (£) Company 2013 (£) - - 26,047,465 25,286,099 11,557 11,557 51,200 51,200 659 26,048,124 50,087 25,336,186 The nature of amounts owed by Group undertakings is such that the expected recovery thereof is in excess of one year, and is thus classified as amounts falling due after one year. The carrying value of current trade and other receivables equals their fair value due mainly to the short term nature of these receivables. Amounts owed by group undertakings represent intercompany loans between the Company and its subsidiaries, they have no fixed repayment terms, bear no interest and are unsecured. Trade and other receivables pledged as security None of the above stated trade and other receivables were pledged as security at period end. Credit quality of trade and other receivables that are neither past due nor impaired can be assessed by reference to historical repayment trends of the individual debtors. 38 KIBO Mining PLC Annual Report and accounts 2014 38 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 13. Cash and Cash equivalents Group (£) 2014 2013 Cash and cash equivalents consist of: Short term convertible cash reserves 186,447 443,763 186,447 443,763 Company (£) 2014 2013 79,575 79,575 Cash and cash equivalents have not been ceded, or placed as encumbrance toward any liabilities as at year end. 14. 31,949 31,949 Share capital - Group and Company 2014 Authorised equity 400,000,000 Ordinary shares of €0.015 each (2013: 200,000,000 Ordinary shares of €0.015 each) 3,000,000,000 deferred shares of €0.009 each €6,000,000 Allotted, issued and fully paid shares (2014: 274,238,757 Ordinary shares of €0.015 each) (2013: 141,116,691 Ordinary shares of €0.015 each) 1,291,394,535 Deferred shares of €0.009 each Number of Shares Balance at 30 December 2013 Shares issued during the period Deferred shares Ordinary Share Capital (£) €27,000,000 €33,000,000 €3,000,000 €27,000,000 €30,000,000 £3,334,675 £9,257,075 12,591,750 £1,741,207 £9,257,075 10,998,282 Deferred Share Capital (£) Share Premium (£) 141,116,691 1,741,207 9,257,075 23,398,853 274,238,757 12,591,750 9,257,075 23,903,307 133,122,066 - Balance at 31 December 2014 Co 2013 1,593,468 9,257,075 - 504,454 - The Deferred Shares will not entitle holders to receive notice of, or attend or vote at any general meeting of the Company or to receive a dividend or other distribution or to participate in any return on capital on a winding up other than the nominal amount paid following a substantial distribution to the holders of the Ordinary Shares in the Company. Accordingly, for all practical purposes the Deferred Shares will be valueless, and it is the boards intention at the appropriate time, to purchase the Deferred Shares at an aggregate consideration of €1. 39 39 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS ted Financial 15. Share based payments reserve The following reconciliation serves to summarise the composition of the share based payment reserve as at period end: Opening balance of share based payment reserve Issue of additional share options and share warrants within Company Reclassification of share based payment reserve on expired share options issued Group (£) 2014 2013 977,543 977,543 (466,565) 510,978 977,543 Company (£) 2014 2013 510,978 510,978 510,978 510,978 Opening balance of share based payment reserve Issue of additional share options and share warrants within Company Costs associated with options issued as stated above. The Group recognised the following expense related to equity settled share based payment transactions: Share option charge Share based payments 2014 (£) 2013 (£) 332,925 171,965 At 31 December 2014 the Company had 1,195,949 options and 110,950 warrants outstanding for the issue of Ordinary shares as follows: Options Total Warrants Total Date of Grant Exercise start date Expiry date Exercise Price Number Granted Exercisable as at 31 December 2013 20 Apr 10 06 Apr 11 07 Sept 12 20 Apr 10 06 Apr 11 07 Sept 12 20 Apr 15 31 Mar 16 07 Sept 15 22.5p 58.2p 34.7p 169,283 760,000 266,666 1,195,949 169,283 760,000 266,666 1,195,949 20 Apr 10 21 Oct 10 20 Apr 10 21 Oct 10 20 Apr 15 21 Oct 15 22.5p 30p 102,617 8,333 110,950 102,617 8,333 110,950 1,306,899 1,306,899 Total Contingently Issuable shares 40 KIBO Mining PLC Annual Report and accounts 2014 40 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Options issued were valued using the following inputs to the Black-Scholes model: Kibo Mining Plc Share Option Information 2012 2.31p 122% 3 years 1.21% Zero Share price when options issued Expected volatility Expected life Risk free rate Expected dividends Kibo Mining Plc Share Option Information 2011 4.1p 147% 5 years 2.73% Zero Disclosure of share option program and replacement awards: Share options acquired through business combinations Reclassification of share based payment reserve on expired share options issued Balance as at 31 December 2014 Mzuri Energy Limited Share Option Information 2011 $ 0.20 84.85% 5 years 1.53% Zero 2014 (£) 466,565 (466,565) - 2013 (£) 466,565 466,565 The fair value of the share-based payment is based upon the Black-Scholes formula, a commonly used option pricing model. The calculation of volatility used in the model is based upon an average of market prices against current market prices of listed companies operating in the mining industry. The following factors are all taken into consideration when the option valuation as per the Black-Scholes model is used: Weighted average share price; Exercise price; Expected volatility; Option life; Expected dividends, and The risk-free interest rate, During the prior period, the Group acquired the entire interest in Mzuri Energy Limited and its subsidiaries. Through its acquisition the Group assumed the responsibility relating to equity-settled share based payment transactions previously entered into by Mzuri Energy Limited. The 466,565 movement in share based payment reserve relates to the expiry of the Mzuri Energy Limited options due to the acquisition of Rukwa Holdings Ltd from Mzuri Energy Ltd. 16. Translation reserves The foreign exchange reserve relates to the foreign exchange effect of the retranslation of the Group’s overseas subsidiaries on consolidation into the Group’s financial statements. 17. Trade and other payables Amounts falling due within one year: Trade payables Other taxes and social welfare costs Amounts falling due after one year: Amounts owed to group undertakings 41 Group 2014 (£) Group 2013 (£) Company 2014 (£) Company 2013 (£) 240,106 - 228,391 32,359 53,668 - 20,552 32,360 240,106 260,750 53,668 7,478 60,390 41 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Other taxes and social welfare costs PAYE/PRSI VAT 18. Group 2014 (£) Group 2013 (£) - 1,350 31,009 32,359 Company 2014 (£) Company 2013 (£) - 1,350 31,010 32,360 Investment in group undertakings – Company Subsidiary undertakings (£) Investments at Cost At 1 January 2013 Capitalisation of loan account receivable – Sloane Developments Limited Impairment of investment in Sloane Developments Limited At 31 December 2013 (£)* Additions Disposals 4,326,511 1,487,515 (4,114,026) 1,700,000 - At 31 December 2014 (£) 1,700,000 * The above investment in subsidiaries comprises the carrying value of the investments in Kibo Mining (Cyprus) Limited and Sloane Developments Limited to the value of £1,700,000, and £- respectively. 42 KIBO Mining PLC Annual Report and accounts 2014 42 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS At 31 December 2014 the Company had the following subsidiary undertakings: Directly held subsidiaries Sloane Developments Limited Kibo Mining (Cyprus) Limited Indirectly held subsidiaries Kibo Gold Limited Jubilee Resources Limited Savannah Mining Limited Reef Miners Limited* Kibo Nickel Limited Eagle Gold Mining Limited Mzuri Energy Limited Rukwa Holdings Limited Rukwa Development Limited Rukwa Mining Company Limited Rukwa Coal Limited Mzuri Power Limited Rukwa Power Tanzania Limited Kibo Uranium Limited Pinewood Resources Limited Makambako Resources Limited Kibo Mining South Africa (Pty) Ltd Kibo Exploration (Tanzania) Limited Activity Incorporated in Interest held (2014) Interest held (2013) Holding Company Treasury Function United Kingdom Cyprus 100% 100% 100% 100% Holding Company Mineral Exploration Mineral Exploration Mineral Exploration Holding Company Mineral Exploration Holding Company Holding Company Holding Company Holding Company Mineral Exploration Holding Company Power Generation Mineral Exploration Mineral Exploration Mineral Exploration Treasury Function Treasury Function Cyprus Tanzania Tanzania Tanzania Cyprus Tanzania Canada Cyprus Cyprus Cyprus Tanzania Cyprus Tanzania Cyprus Tanzania Tanzania South Africa Tanzania 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% *During the prior period the Company acquired the entire share capital of Reef Miners Limited for the cash consideration of £145,699. The value of the investments is dependent on the discovery and successful development of evaluation and exploration assets. Should the development of the evaluation and exploration assets prove unsuccessful, the carrying value in the statement of financial position will be written off. In the opinion of the Directors’ the carrying value of the investments is appropriate. 43 43 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS The aggregate pre-consolidation capital and reserves and results of the subsidiary undertakings for the last relevant financial period were as follows: Company – 2014 Financial Period Sloane Developments Limited Kibo Mining (Cyprus) Limited Kibo Gold Limited Jubilee Resources Limited Savannah Mining Limited Reef Mining Limited* Kibo Nickel Limited Eagle Gold Mining Limited Mzuri Energy Limited Rukwa Holdings Limited Rukwa Development Limited Rukwa Mining Company Limited Rukwa Coal Limited Mzuri Power Limited Rukwa Power Tanzania Limited Kibo Uranium Limited Pinewood Resources Limited Makambako Resources Limited Kibo Mining South Africa Limited Kibo Exploration (Tanzania) Limited Company – 2013 Financial Period Sloane Developments Limited Kibo Mining (Cyprus) Limited Kibo Gold Limited Jubilee Resources Limited Savannah Mining Limited Reef Mining Limited* Kibo Nickel Limited Eagle Gold Mining Limited Mzuri Energy Limited Rukwa Holdings Limited Rukwa Development Limited Rukwa Mining Company Limited Rukwa Coal Limited Mzuri Power Limited Rukwa Power Tanzania Limited Kibo Uranium Limited Pinewood Resources Limited Makambako Resources Limited Kibo Mining South Africa Limited Kibo Exploration (Tanzania) Limited Net Asset Value/ (Net Liability Value) (£) (507) (23,295,535) 143,221 (992,132) (661,078) (666,352) (1,057) (385,692) 151,533 3,105 170,678 155,545 35,950 (900) (993) (380,530) (30,962) 8,289 (852,946) Profit/(loss) for the period (£) Net Asset Value/ (Net Liability Value) (£) 159 439,412 141,998 (758,587) (507,898) (422,974) (543) (236,367) (18,789,090) 323,095 (3,500) (5,864) 168,911 (10,310) 1,318 (233,952) (28,039) 7,478 (1,016,092) Profit/(loss) for the period (£) (666) (24,870,353) (1,249) (176,204) (114,969) (204,753) (306,953) (127,113) (240,158) (363,031) 12,971 (1,411) (134,538) (11,488) (5,774) (124,663) (1,127) 1,132 212,934 (800) (499,052) (3,231) (299,711) (188,321) (441,761) (565) (14,624) (311,276) (2,040,570) (3,231) (3,231) (150,754) (565) (788) (122,397) (9,189) (760) 48,327 * The profit and loss pertaining to newly acquired subsidiary undertakings has been included from the date of acquisition so as to prevent distortion of pre-acquisition profit and loss. 44 KIBO Mining PLC Annual Report and accounts 2014 44 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS 19. Related party transactions Group companies Related parties of the Group comprise subsidiaries, joint ventures, significant shareholders, the Board of Directors and related parties in terms of the listing requirements. Transactions between the Company and its subsidiaries, which are related parties, have been eliminated on consolidation. Board of Directors/ Key Management Name Louis Coetzee Andreas Lianos Louis Scheepers Relationship Director of Mzuri Exploration Services Director of Mzuri Exploration Services, River Group & Boudica Group Director of Mzuri Exploration Services Mzuri Exploration Services Mzuri Exploration Services Limited provides the Group with on-going exploration services in Tanzania. Other entities over which controllers/trustees/directors/key managers or their close family have control or significant influence River Group River Group provide corporate advisory services and is the Company’s Designated Advisor. Boudica Group Boudica Group provides corporate secretarial services to the Group. Family/close associates of controllers/trustees/directors/key managers: Sun Mining Limited A proprietary Director of Sun Mining Limited is also a director of Mzuri Exploration Services Limited. Kibo Mining Plc is the beneficial owner and controls the following companies and as such are considered related parties: Directly held subsidiaries: Sloane Developments Limited Kibo Mining (Cyprus) Limited Indirectly held subsidiaries: Kibo Gold Limited Jubilee Resources Limited Savannah Mining Limited Reef Mining Limited Kibo Nickel Limited Eagle Gold Mining Limited Mzuri Energy Limited Rukwa Holdings Limited Rukwa Development Limited Rukwa Mining Company Limited Rukwa Coal Limited Mzuri Power Limited Rukwa Power Tanzania Limited Kibo Uranium Limited Pinewood Resources Limited Makambako Resources Limited Kibo Mining South Africa Limited Kibo Exploration (Tanzania) Limited The only transactions during the period between the Company and its subsidiaries were intercompany loans. The loans do not have fixed repayment terms and are unsecured. 45 45 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS The following transactions have been entered into with related entities, by way of common directorship, throughout the financial period River Group was paid £100,000 (2013: €18,000) for professional services through the issue of shares (6,666,670 ordinary shares at 1.5p issued during October 2014) as settlement, and a further £30,000 (2013: £30,000) for designated advisor services during the year settled through cash. No fees are payable to River Group as at year end. The expenditure was recognised in the Company as part of administrative expenditure Mzuri Exploration Services Limited was paid US$420,000 (2013: $420,000) through cash consideration for exploration related management services of the Tanzania projects, with a balance of US$138,429 payable at year end. The Boudica Group was paid €36,000 (2013: €24,000) in cash for corporate services during the current financial period. No fees are payable to Boudica Group at year end. 20. Financial Instruments and Financial Risk Management The Group and Company’s principal financial instruments comprise cash and cash equivalents. The main purpose of these financial instruments is to provide finance for the Group and Company’s operations. The Group has various other financial assets and liabilities such as trade receivables and trade payables, which arise directly from its operations. It is, and has been throughout the 2014 and 2013 financial period, the Group and Company’s policy not to undertake trading in derivatives. The main risks arising from the Group and Company’s financial instruments are foreign currency risk, credit risk, liquidity risk, interest rate risk and capital risk. Management reviews and agrees policies for managing each of these risks which are summarised below. Financial instruments of the Group are: Financial assets at amortised cost Trade and other receivables Cash and cash equivalents Financial liabilities at amortised cost Trade payables Financial instruments of the Company are: Financial assets at amortised cost Trade and other receivables – non current Trade and other receivables – current Cash and cash equivalents Financial liabilities at amortised cost Trade payables – non current Trade payables - current 2014 (£) Loans and Financial receivables liabilities 2013 (£) Loans and Financial receivables liabilities 11,557 186,447 - 51,200 443,763 - - 240,106 - 228,391 198,004 240,106 2014 (£) Loans and Financial receivables liabilities 494,963 228,391 2013 (£) Loans and Financial receivables liabilities 26,047,465 659 79,575 - 25,286,099 50,087 31,949 - - 53,668 - 7,478 20,552 26,127,699 46 KIBO Mining PLC Annual Report and accounts 2014 53,668 46 25,368,135 28,030 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Foreign currency risk The Group undertakes certain transactions denominated in foreign currencies and exposures to exchange rate fluctuations therefore arise. Exchange rate exposures are managed by continuously reviewing exchange rate movements in the relevant foreign currencies. The exposure to exchange rate fluctuations is limited as the Company’s subsidiaries operate mainly with Sterling, Euros, South African Rands, US Dollar and Tanzanian Shillings. At the period ended 31 December 2014, the Group had no outstanding forward exchange contracts. Exchange rates used for conversion of foreign subsidiaries undertakings were: ZAR to GBP (Spot) ZAR to GBP (Average) USD to GBP (Spot) USD to GBP (Average) EURO to GBP (Spot) EURO to GBP (Average) CAD to GBP (Spot) CAD to GBP (Average) 2014 0.0554 0.0560 0.6437 0.6072 0.7824 0.8062 0.0553 0.5497 2013 0.05726 0.05773 0.60481 0.60638 0.83283 0.83478 0.56373 0.56688 The executive management of the Group monitor the Group's exposure to the concentration of fair value estimation risk on a monthly basis. Group Sensitivity Analysis: If the GBP:EURO/ EURO:USD exchange rate was to increase/decrease by 10%, the effect on foreign currency translation would be £2.3 million and £0.46 million respectively. Credit risk Credit risk refers to the risk that a counter party will default on its contractual obligations resulting in financial loss to the Group. As the Group does not, as yet, have any sales to third parties, this risk is limited. The Group and Company’s financial assets comprise receivables and cash and cash equivalents. The credit risk cash and cash equivalents is limited because the counterparties are banks with high credit-ratings assigned international credit rating agencies. The Group and Company’s exposure to credit risk arise from default of counterparty, with a maximum exposure equal to the carrying amount of cash and cash equivalents in consolidated statement of financial position. on by its its The Group does not have any significant credit risk exposure to any single counterparty or any Group of counterparties having similar characteristics. The Group defines counterparties as having similar characteristics if they are connected or related entities. Financial assets exposed to credit risk at period end were as follows: Financial instruments Trade & other receivables Cash & cash equivalents Group (£) 2014 2013 11,557 186,447 Company (£) 2014 2013 51,200 26,048,124 25,336,186 443,763 79,575 31,949 Liquidity risk management Ultimate responsibility for liquidity risk management rests with the Board of Directors, which has built an appropriate liquidity risk management framework for the management of the Group and Company’s short, medium and long-term funding and liquidity management requirements. The Group manages liquidity risk by maintaining adequate reserves and by continuously monitoring forecast and actual cash flows and matching the maturity profiles of financial assets and liabilities. Cash forecasts are regularly produced to identify the liquidity requirements of the Group. To date, the Group has relied on shareholder funding to finance its operations. The Group had no external borrowing facilities at 31 December 2014. 47 47 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS The Group and Company’s financial liabilities as at 31 December 2014 were all payable on demand, other than the trade payables to other Group undertakings. Less than 1 Greater than 1 Group (£) year year At 31 December 2014 Trade and other payables 240,106 At 30 December 2013 Trade and other payables Company (£) At 31 December 2014 Trade and other payables At 30 December 2013 Trade and other payables 260,750 - 53,668 - 20,552 7,478 Interest rate risk The Group and Company’s exposure to the risk of changes in market interest rates relates primarily to the Group and Company’s holdings of cash and short term deposits. It is the Group and Company’s policy as part of its management of the budgetary process to place surplus funds on short term deposit in order to maximise interest earned. Group Sensitivity Analysis: Currently no significant impact exists due to possible interest rate changes on the company’s interest bearing instruments. Capital risk management The Group manages its capital to ensure that entities in the Group will be able to continue as a going concern while maximising the return to stakeholders through the optimisation of the debt and equity balance. The Group manages its capital structure and makes adjustments to it, in light of changes in economic conditions. To maintain or adjust its capital structure, the Group may adjust or issue new shares or raise debt. No changes were made in the objectives, policies or processes during the period ended 31 December 2014. The capital structure of the Group consists of equity attributable to equity holders of the parent, comprising issued capital, reserves and retained losses as disclosed in the consolidated statement of changes in equity. Fair values The carrying amount of the Group and Company’s financial assets and financial liabilities recognised at amortised cost in the financial statements approximate their fair value. Hedging At 31 December 2014, the Group had no outstanding contracts designated as hedges. 21. Post Statement of Financial Position events Broker Appointment The Company has appointed a company joint broker, Beaufort Securities Limited in terms of the listing requirements. Exploration Activities The Company has entered into a Memorandum of Understanding (“MOU”) with Metal Tiger Plc (“Metal Tiger”) with a view to a 50/50 Joint Venture (“JV”) on Kibo’s uranium-prospective portfolio in Tanzania (“Pinewood Portfolio”), and has entered into a Memorandum of Understanding (“MOU”) for a 50/50 Joint Venture (“JV”) with Metal Tiger plc (“Metal Tiger”) on the Company’s Morogoro South gold-prospective exploration portfolio in Tanzania (“Morogoro Portfolio”). 48 KIBO Mining PLC Annual Report and accounts 2014 48 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 NOTES TO THE CONSOLIDATED AND COMPANY FINANCIAL STATEMENTS Signing of SEPCOIII Subsequent to year end, the Company has signed a Joint Development Agreement (“JDA”) in respect of the Rukwa Coal to Power Project (“RCPP”) with SEPCOIII. Share placement Subsequent to year end, the Company has executed the following share placing’s: Date of Issue 21 January 2015 2 March 2015 21 April 2015 Number of Ordinary shares issued 10,000,000 19,000,000 25,000,000 Issue price Gross placing £0.030 £0.050 £0.060 £300,000 £950,000 £1,500,000 Proceeds of placing The Company’s brokers Hume Capital Securities plc appointed administrators subsequent to year end, resulting in approximately £204,000 in share placing (representing the consideration for 4,080,000 Kibo shares which were to be issued to Hume Capital’s discretionary clients) which is unlikely to be released to the Company. The shares which were issued by the Company in relation to this portion of the placing will likely be declared forfeit and cancelled by the Company, as provided for by the Company’s Articles of Association. Warrants issued an exercised A total of 10,000,000 share warrants were granted to Metal Tiger plc in relation to the “Pinewood Joint-Venture” which was subsequently exercised and converted to shares at £0.03 on 21 January 2015. 22. Going concern The Group’s financial statements have been prepared on the basis of accounting policies applicable to a going concern. This basis presumes that funds will be available to finance future operations and that the realisation of assets and settlement of liabilities, contingent obligations and commitments will occur in the ordinary course of business. 23. Commitments and Contingencies The Group does not have identifiable material contingencies or commitments as at the reporting date (2013: nil). Any contingent rental is expensed in the period in which it is incurred. 49 49 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 APPENDIX 1 - HEADLINE EARNINGS PER SHARE Accounting policy Headline earnings per share (HEPS) is calculated using the weighted average number of ordinary shares in issue during the period and is based on the earnings attributable to ordinary shareholders, after excluding those items as required by Circular 2/2013 issued by the South African Institute of Chartered Accountants (SAICA). Reconciliation of Headline earnings per share Headline loss per share Headline loss per share comprises the following: Reconciliation of headline loss per share: Profit/ (Loss) for the period attributable to normal shareholders Impairment of Goodwill Reversal of impairment of Intangible assets/ (Impairment of Intangible assets) Headline (Loss) for the period attributable to normal shareholders 31 December 2014 (£) 2,215,004 (4,695,356) 31 December 2013 (£) (15,583,337) 3,454,570 11,336,105 (0.013) (0.007) (2,570,352) Headline loss per ordinary share (792,662) In order to accurately reflect the weighted average number of ordinary shares for the purposes of basic earnings, dilutive earnings and headline earnings per share as at year end, the weighted average number of ordinary shares was adjusted retrospectively. 50 KIBO Mining PLC Annual Report and accounts 2014 50 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 APPENDIX 2 - LISTING OF PROSPECTING LICENCES Schedule of prospecting and exploration licenses The following detailed schedule is attached in order to provide additional information pertaining specifically to the interest's held by the Company in the identifiable exploration projects as at year end: Rukwa Coal Limited PROPERTIES UNDER LICENCES OFFER DETAILS NO 1 2 HISTORY LICENCE PLR 5352/2008 PLR 5503/2008 LICENCE DETAILS OFFER REG. NO. OFFER DATE LICENCE NO. GRANTED DATE EXPIRY DATE HQ-G16707 HQ-G16803 22-Feb-11 22-Feb-11 PL 7005/2001 PL 7006/2011 21-Apr-11 12-Apr-11 20-Apr-15 11-Apr-15 LOCATION (AREA/DISTRICT) IWANDA - CHUNYA/MBOZI IWANDA - CHUNYA/MBOZI SQ.KM 198.81 296.81 Pinewood Resources Limited PROPERTIES UNDER LICENCES OFFER DETAILS LICENCE DETAILS NO HISTORY LICENCE OFFER REG. NO. OFFER DATE LICENCE NO. GRANTED DATE EXPIRY DATE LOCATION (AREA/DISTRICT) SQ.KM 1 FIRST RENEWAL HQ-P 16193 15-Nov-11 PL 7721/2012 23-Feb-12 22-Feb-16 SONGWE RIVER - MBEYA/MBOZI 3.99 2 FIRST RENEWAL HQ-P 16192 28-Oct-11 PL 8036/2012 18-Jun-12 Licence at the ministry GALULA-MBEYA/CHUNYA 66.77 3 FIRST RENEWAL HQ-P20674 28-Sep-12 PL 8496/2012 10-Dec-12 09-Dec-16 SONGEA - MBINGA 10.07 4 FIRST RENEWAL HQ-P19757 10-Dec-12 PL 9100/2013 29-Apr-13 Licence at the ministry MATEPWENDE - SONGEA 297.98 5 FIRST RENEWAL HQ-P21470 22-Aug-13 PL 9477/2013 21-Nov-13 Licence at the ministry SAKAMAGANGA - SONGEA 75.76 6 FIRST RENEWAL HQ-P20099 04-Oct-13 PL 9486/2013 27-Nov-13 Licence at the ministry LUTUKILA & LUHIRA RIVER - SONGEA 189.03 Eagle Gold Mining Limited PROPERTIES UNDER LICENCES NO 1 2 3 4 5 6 7 8 9 10 11 HISTORY LICENCE PL 4383/2007 PLR 4386/2007 PLR 3729/2005 PLR 4382/2007 HQ-P16508 PLR 5458/2008 PLR 4386/2007 PLR 4382/2007 PL 4383/2007 HQ-P25439 OFFER DETAILS OFFER REG. NO. OFFER DATE HQ-G17646 21-Mar-13 HQ-G17366 16-Jul-12 HQ-G17800 10-Sep-13 HQ-G17801 10-Sep-13 HQ-G17888 16-Sep-13 HQ-P16508 25-Jun-10 HQ-G16789 12-Oct-11 HQ-P20253 06-Nov-12 HQ-P20177 16-Nov-12 HQ-P21514 13-Dec-12 HQ-P25439 19-Dec-12 51 LICENCE NO. PL 4383/2007 PL 5792/2009 OFFERED OFFERED APP PL 7308/2013 PL 8773/2013 PL 8836/2013 PL 9000/2013 PL 9038/2013 PL 9041/2013 LICENCE DETAILS GRANTED DATE 02-Apr-13 12-Jun-12 13-Aug-13 13-Aug-13 5-Oct-2013 08-Apr-13 14-Feb-13 08-Feb-13 08-Feb-13 27-Mar-13 27-Mar-13 EXPIRY DATE 01-Apr-15 11-Jun-15 12-Aug-16 12-Aug-16 4-Oct-2016 07-Apr-17 Awaiting Documents Awaiting Documents Awaiting Documents 26-Mar-17 26-Mar-17 LOCATION (AREA/DISTRICT) KWAMTORO - KONDOA HOMBOLO - DODOMA KWAMTORO - KONDOA KWAMTORO - KONDOA MEIA MEIA - DODOMA KWAMTORO - DODOMA/KONDOA MEIA MEIA - DODOMA KWAMTORO - DODOMA/KONDOA KWAMTORO - KONDOA KWAMTORO - DODOMA/KONDOA TANGANYIKA/MPANDE - TABORA SQ.KM 12.16 60.2 98.07 66.84 93.78 290.15 298.02 297.54 299.04 11.93 67.02 51 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 APPENDIX 2 - LISTING OF PROSPECTING LICENCES Savannah Mining Limited NO 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 OFFER DETAILS HISTORY LICENCE OFFER REG. NO. OFFER DATE HQ-G16993 N/A N/A HQ-G17203 HQ-G17203 13-Apr-12 HQ-G17580 HQ-G17580 31-Dec-12 HQ-G17628 HQ-G17628 14-May-13 HQ-G17629 HQ-G17629 14-May-13 HQ-P17621 HQ-P17621 23-Nov-10 HQ-P17618 HQ-P17618 23-Nov-10 HQ-P16872 HQ-P16872 28-Sep-11 4606 4606 03-Mar-08 HQ-P17637 HQ-P17637 27-Jan-12 HQ-P20614 HQ-P20614 04-Apr-12 HQ-P17729 HQ-P17729 22-Feb-12 HQ-P17024 HQ-P17024 04-Jun-12 HQ-P20988 HQ-P20988 30-Oct-12 HQ-P20919 HQ-P20919 25-Oct-12 HQ-P21242 HQ-P21242 25-Oct-12 HQ-P21235 HQ-P21235 25-Oct-12 HQ-P17193 HQ-P17193 06-Aug-12 HQ-P21234 HQ-P21234 25-Oct-12 HQ-P21291 HQ-P21291 15-Nov-12 HQ-P17630 HQ-P17630 16-Nov-12 HQ-P17641 HQ-P17641 16-Nov-12 HQ-P21380 HQ-P21380 16-Nov-12 HQ-P21290 HQ-P21290 04-Mar-13 HQ-P20859 HQ-P20859 04-Mar-13 HQ-P24733 HQ-P24733 24-Apr-13 HQ-P21289 HQ-P21289 08-Apr-13 HQ-P19713 HQ-P19713 22-Aug-13 PROPERTIES UNDER LICENCES LICENCE DETAILS LICENCE NO. GRANTED DATE PL 5243/2008 24-Jul-11 PL 5509/2008 31-Dec-11 PL 6283/2009 31-Dec-12 OFFER 30-Mar-13 OFFER 30-Mar-13 PL 7100/2011 03-Aug-11 PL 7105/2011 25-Aug-11 PL 7589/2012 23-Jan-12 PL 7590/2012 23-Jan-12 PL 7887/2012 04-May-12 PL 7991/2012 04-Jun-12 PL 7994/2012 04-Jun-12 PL 8109/2012 05-Jul-12 PL 8401/2012 25-Oct-12 PL 8806/2013 08-Feb-13 PL 8808/2013 08-Feb-13 PL 8809/2013 08-Feb-13 PL 8834/2013 08-Feb-13 PL 8846/2013 08-Feb-13 PL 8895/2013 08-Feb-13 PL 9001/2013 08-Feb-13 PL 9003/2013 08-Feb-13 PL 9005/2013 08-Feb-13 PL 9196/2013 21-Jun-13 PL 9197/2013 21-Jun-13 PL 9311/2013 04-Oct-13 PL 9312/2013 11-Sep-13 PL 9478/2013 21-Nov-13 52 KIBO Mining PLC Annual Report and accounts 2014 EXPIRY DATE 23-Jul-14 30-Dec-14 30-Dec-15 29-Mar-16 29-Mar-16 02-Aug-15 24-Aug-15 22-Jan-16 22-Jan-16 03-May-16 03-Jun-16 03-Jun-16 04-Jul-16 With Ministry With Ministry With Ministry With Ministry With Ministry With Ministry With Ministry With Ministry With Ministry With Ministry 20-Jun-17 With Ministry With Ministry 10-Sep-17 With Ministry 52 LOCATION (AREA/DISTRICT) SQ.KM LUNGUYA - KAHAMA 20.00 KIKUBIJI - KWIMBA 11.37 KIKUBIJI - KWIMBA 19.90 BUKONDO - GEITA 4.83 BUKONDO - GEITA 11.51 BUKONDO - GEITA 25.01 MWAMAGALA - KAHAMA 3.72 KIRUMWA-GEITA 50.15 KWIMBA 26.43 USHIROMBO-KAHAMA 40.93 KIKULIJI - KWIMBA 9.95 FUKALO - MAGU 15.35 KITONGO - MAGU 8.39 NUNDU - KWIMBA 2.56 KITONGO - MISUNGWI 4.19 MULELE RIVER - BUKOMBE 10.74 USHIROMBO - BUKOMBE 20.47 NUNDU - KWIMBA 2.56 BUKOMBE - BUKOMBE 25.6 KWIMBA - KWIMBA 8.53 KAHAMA-KAHAMA 51.19 GEITA-GEITA 51.19 KAHAMA - BUKOMBE 18.48 FUKALO - MISUNGWI 7.68 IGENGI - MISUNGWI 12.29 KIKULIJI - KWIMBA 9.95 LUNGUYA - KAHAMA 8.95 GEITA - GEITA 12.79 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 APPENDIX 2 - LISTING OF PROSPECTING LICENCES Jubilee Resources Limited PROPERTIES UNDER LICENCES OFFER DETAILS LICENCE DETAILS NO HISTORY LICENCE OFFER REG. NO. OFFER DATE LICENCE NO. GRANTED DATE EXPIRY DATE LOCATION (AREA/DISTRICT) SQ.KM 1 FIRST RENEWAL - PL 6542/2009 HQ-G17583 2 FIRST RENEWAL - PL 6250/2009 HQ-G17581 3 FIRST RENEWAL - PL 6598/2010 HQ-G17797 4 FIRST RENEWAL - PL 6601/2010 HQ-G17798 5 FIRST RENEWAL - PL 6622/2010 HQ-G17831 6 FIRST RENEWAL HQ-G17167 7 FIRST RENEWAL HQ-P19135 8 FIRST RENEWAL HQ-P24634 9 FIRST RENEWAL HQ-G17355 10 FIRST RENEWAL HQ-G17354 11 FIRST RENEWAL HQ-G17356 12 13 14 15 16 FIRST RENEWAL HQ-G17803 FIRST RENEWAL HQ-G17242 FIRST RENEWAL HQ-P20388 FIRST RENEWAL HQ-P20642 FIRST RENEWAL HQ-P26016 30-Nov-12 30-Nov-12 22-Jul-13 22-Jul-13 13-Aug-13 04-Nov-11 09-Sep-08 28-Oct-11 05-Jul-12 15-Aug-12 21-Aug-12 10-Sep-13 16-May-12 28-Sep-12 16-Oct-12 15-May-13 PL 6249/2009 PL 6250/2009 PL 6598/2010 PL 6601/2010 PL 6622/2010 PL 7997/2012 PL 8299/2012 PL 8395/2012 PL 5803/2009 PL 5885/2009 PL 5837/2009 PL 6541/2010 PL 5625/2009 PL 8497/2012 PL 8839/2013 PL 9203/2013 31 December 2012 31 December 2012 13 August 2013 13 August 2013 21 September 2013 04 June 2012 28-Sep-12 25-Oct-12 12-Jun-12 12-Jun-12 12-Jun-12 13-Aug-13 13-Feb-12 10-Dec-12 08-Feb-13 21-Jun-13 30 December 2015 30 December 2015 12 August 2016 12 August 2016 20 September 2016 03 June 2016 27 September 2016 24 October 2016 11 June 2015 11 June 2015 11 June 2015 12 August 2016 12 February 2015 09 December 2016 AWAITING AWAITING NGEZA/KIBATI - HANDENI NGEZA/KIKETI - HANDENI MLALI - KILOSA/KONGWA SONGE - KITETO/HANDENI SONGE - KILOSA SONGE - HANDENI MKATA/MOROGORO - KILOSA TAMOTA - HANDENI MATOMBO - MOROGORO MGETA - MOROGORO KINGOLWERA - MOROGORO ULUGURU - MOROGORO MATOMBO - MOROGORO MOROGORO - MOROGORO MOROGORO - MOROGORO MATOMBO - MOROGORO 23.15 50.61 97.22 97.71 98.83 88.09 119.69 55.96 21.35 40.88 20 19.02 43.43 158.97 39.67 43.88 53 53 KIBO Mining PLC Annual Report and accounts 2014 KIBO MINING PLC ANNUAL FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2014 APPENDIX 2 - LISTING OF PROSPECTING LICENCES Reef Miners Limited O F F E R D E T A ILS OF F ER R EG. OF F ER N OH IS T O R Y LIC E N C E N O. DATE 1 P L 4191/2007 HQ-G17632 19-A pr-13 2 P L 4213/2006 HQ-G17158 26-Oct-11 3 P L 4321/2007 HQ-G17657 31-M ay-13 4 P L 4324/2007 HQ-G17881 25-Oct-13 5 P L 4355/2007 HQ-G1767 14-M ay-13 6 P L 4413/2007 HQ-G17685 31-Dec-13 7 P L 4652/2007 HQ-G17880 12-Sep-13 8 P L 4732/2007 HQ-G17891 25-Oct-13 9 P L 4756/2007 HQ-G17884 16-Sep-13 10 P L 4794/2007 HQ-G17890 25-Oct-13 11 P L 4822/2007 HQ-G17933 25-Oct-13 12 P L 5253/2008 HQ-G16970 16-M ay-12 13 P L 5583/2008 HQ-G17212 01-Dec-11 14 P L 5685/2009 HQ-G17319 04-Jun-12 15 P L 5749/2009 HQ-G17376 24-Jul-12 16 P L 5789/2009 HQ-G17374 24-Jul-12 17 P L 6248/2009 HQ-G17585 31-Dec-12 18 P L 6282/2009 HQ-G17586 14-Jan-13 19 P L 6284/2009 HQ-G17584 31-Dec-12 20 P L 6398/2010 HQ-G17667 14-M ay-13 21 P L 6485/2010 HQ-G17745 11-Sep-13 22 P L 6720/2010 HQ-G17885 16-Sep-13 23 P L 6835/200 HQ-G17886 16-Sep-13 24 FIRST RENEWA L HQ-P 16025 31-M ay-10 25 FIRST RENEWA L HQ-P 17959 26-Jun-10 26 FIRST RENEWA L HQ-P 17277 28-Jun-10 27 FIRST RENEWA L HQ-P 16577 28-Jun-10 28 FIRST RENEWA L HQ-P 18535 09-A ug-11 29 FIRST RENEWA L HQ-P 16576 03-Oct-11 30 FIRST RENEWA L HQ-P 17762 20-Jun-12 31 FIRST RENEWA L HQ-P 19383 15-A ug-12 32 FIRST RENEWA L HQ-P 19356 21-A ug-12 33 FIRST RENEWA L HQ-P 19492 21-A ug-12 34 FIRST RENEWA L HQ-P 19513 21-A ug-12 35 FIRST RENEWA L HQ-P 19256 21-A ug-12 36 FIRST RENEWA L HQ-P 19444 21-A ug-12 37 FIRST RENEWA L HQ-P 17764 29-A ug-12 38 FIRST RENEWA L HQ-P 19445 29-A ug-12 39 FIRST RENEWA L HQ-P 19568 17-Sep-12 40 FIRST RENEWA L HQ-P 21335 25-Oct-12 41 FIRST RENEWA L HQ-P 21020 25-Oct-12 42 FIRST RENEWA L HQ-P 20745 25-Oct-12 43 FIRST RENEWA L HQ-P 20617 25-Oct-12 44 FIRST RENEWA L HQ-P 19038 25-Oct-12 45 FIRST RENEWA L HQ-P 19255 16-No v-12 46 FIRST RENEWA L HQ-P 21945 20-No v-12 47 FIRST RENEWA L HQ-P 21684 16-No v-12 48 FIRST RENEWA L HQ-P 18235 16-No v-12 49 FIRST RENEWA L HQ-P 21761 16-No v-12 50 FIRST RENEWA L HQ-P 18769 16-No v-12 51 FIRST RENEWA L HQ-P 21050 13-Dec-12 52 FIRST RENEWA L HQ-P 21167 24-Dec-12 53 FIRST RENEWA L HQ-P 21336 04-M ar-13 54 FIRST RENEWA L HQ-P 20595 24-A pr-13 55 FIRST RENEWA L HQ-P 22471 24-A pr-13 56 FIRST RENEWA L HQ-P 22359 24-A pr-13 57 FIRST RENEWA L HQ-P 21842 24-A pr-13 58 FIRST RENEWA L HQ-P 22360 24-A pr-13 59 FIRST RENEWA L HQ-P 21721 24-A pr-13 60 FIRST RENEWA L HQ-P 22031 08-A pr-13 61 FIRST RENEWA L HQ-P 19765 22-A ug-13 62 FIRST RENEWA L HQ-P 21049 22-A ug-13 63 FIRST RENEWA L HQ-P 21409 04-Oct-13 64 FIRST RENEWA L HQ-P 22470 04-Oct-13 65 FIRST RENEWA L HQ-P 22664 04-Oct-13 66 FIRST RENEWA L HQ-P 20596 24-Sep-13 67 FIRST RENEWA L HQ-P 22773 01-No v-10 68 FIRST RENEWA L HQ-P 21431 26-M ar-10 69 FIRST RENEWA L HQ-P 18834 25-Jul-08 LIC E N C E N O. OFFER A P P LICA TION OFFER OFFER OFFER OFFER A P P LICA TION OFFER A P P LICA TION OFFER OFFER P L 5253/2008 A P P LICA TION P L 5685/2009 P L 5749/2009 P L 5789/2009 P L 6248/2009 P L 6282/2009 P L 6284/2009 OFFER OFFER A P P LICA TION OFFER P L 6914/2011 P L 6960/2011 P L 6967/2011 P L 7173/2011 P L 7336/2011 P L 7425/2011 P L 8139/2012 P L 8363/2012 P L 8365/2012 P L 8384/2012 P L 8385/2012 P L 8386/2012 P L 8390/2012 P L 8482/2012 P L 8483/2012 P L 8507/2012 P L 8680/2012 P L 8681/2012 P L 8682/2012 P L 8683/2012 P L 8686/2012 P L 8730/2012 P L 8735/2012 P L 8740/2012 P L 8741/2012 P L 8742/2012 P L 8743/2012 P L 9011/2013 P L 9028/2013 P L 9073/2013 P L 9179/2013 P L 9180/2013 P L 9181/2013 P L 9183/2013 P L 9185/2013 P L 9192/2013 P L 9200/2013 P L 9475/2013 P L 9476/2013 P L 9493/2013 P L 9494/2013 P L 9495/2013 P L 9496/2013 P L 9642/2014 P L 9688/2014 P L 9689/2014 LIC E N C E D E T A ILS GR A N T ED DATE E X P IR Y D A T E 30-M ar-13 29-M ar-16 23-No v-11 22-No v-14 02-M ay-13 01-M ay-16 19-Sep-13 18-Sep-16 09-M ay-13 08-M ay-16 24-M ay-13 23-M ay-16 18-Sep-13 17-Sep-16 20-Sep-13 19-Sep-16 19-Oct-13 18-Oct-16 20-Oct-13 19-Oct-16 07-No v-13 06-No v-16 25-Jul-11 24-Jul-14 31-Dec-11 30-Dec-14 02-M ay-12 01-M ay-15 12-Jun-12 11-Jun-15 12-Jun-12 11-Jun-15 31-Dec-12 30-Dec-15 31-Dec-12 30-Dec-15 31-Dec-12 30-Dec-15 05-M ay-13 04-M ay-16 16-Jul-13 15-Jul-16 05-Oct-13 04-Oct-16 19-Oct-13 18-Oct-16 22-Feb-11 21-Feb-15 12-A pr-11 11-A pr-15 28-Feb-11 27-Feb-15 28-Oct-11 27-Oct-15 16-No v-11 15-No v-15 06-Dec-11 05-Dec-15 07-A ug-12 06-A ug-16 14-No v-12 13-No v-16 13-No v-12 12-No v-16 16-Oct-12 15-Oct-16 16-Oct-12 15-Oct-16 16-Oct-12 15-Oct-16 16-Oct-12 15-Oct-16 10-Dec-12 09-Dec-16 10-Dec-12 09-Dec-16 12-Dec-12 11-Dec-16 24-Dec-12 23-Dec-16 24-Dec-12 23-Dec-16 24-Dec-12 23-Dec-16 24-Dec-12 23-Dec-16 24-Dec-12 23-Dec-16 31-Dec-12 30-Dec-16 31-Dec-12 30-Dec-16 31-Dec-12 30-Dec-16 31-Dec-12 30-Dec-16 31-Dec-12 30-Dec-16 31-Dec-12 30-Dec-16 27-M ar-13 26-M ar-17 27-M ar-13 26-M ar-17 27-M ar-13 26-M ar-17 10-Jun-13 WITH M INISTRY 13-Jun-13 WITH M INISTRY 13-Jun-13 WITH M INISTRY 13-Jun-13 WITH M INISTRY 13-Jun-13 WITH M INISTRY 01-Jul-13 WITH M INISTRY 21-Jun-13 WITH M INISTRY 21-No v-13 WITH M INISTRY 21-No v-13 WITH M INISTRY 27-No v-13 WITH M INISTRY 27-No v-13 WITH M INISTRY 27-No v-13 WITH M INISTRY 27-No v-13 WITH M INISTRY 12-Dec-13 WITH M INISTRY 20-Feb-14 26-03-2015 18-Feb-14 23-04-2015 54 KIBO Mining PLC Annual Report and accounts 2014 LO C A T IO N ( A R E A / D IS T R IC T ) EM IN P A SHA - B IHA RA M ULO NYA KA GOM B A /IM WERU - B IHA RA M ULO NYA M IREM B E - B IHA RA M ULO NYA GHONA - GEITA /SENGEREM A NYA M IREM B E - B UKOM B E KA SA M WA - GEITA B IHA RA M ULO KA SA M WA - SENGEREM A USHIROM B O - B UKOM B E B UZIRA YOM B O - B IHA RA M ULO M B OGWE - KA HA M A NYA KA GOM B A - B IHA RA M ULO/GEITA LIGEM B E - KWIM B A GEITA - GEITA SIGA HILLS - KA HA M A GEITA - GEITA LUB A NDO/KA SA M WA - GEITA GEITA - GEITA IM WERU - GEITA IKOKA - B IHA RA M ULO B USHIROM B O - B UKOM B E M B OGWE - KA HA M A NYA KA GOM B A - GEITA IM WERU - B IHA RA M ULO NYA KA GOM B A - B IHA RA M ULO B UKOM B E SIM A - KWIM B A GEITA - GEITA NGOB O - KWIM B A /M ISUNGWI M UKUNGO - B IHA RA M ULO B UZIRA YOM B O - B IHA RA M ULO IM WERU - GEITA IKOKA - B IHA RA M ULO ITA KA HOGO - B IHA RA M ULO USHIROM B O - B UKOM B E GEITA - GEITA ISA M B A LA - B IHA RA M ULO KA B A HE - GEITA UGA M B ILO - KWIM B A ISA M B A LA - B IHA RA M ULO NYA KA GOM B A - B IHA RA M ULO NGOB O - M ISUNGWI LUGOB A - GEITA SIM A - KWIM B A /M ISUNGWI USHIROM B O - KA HA M A KIGOSI - B UKOM B E NYA M IREM B E - B IHA RA M ULO NYA KA GOM B A TONDO - GEITA KA SA M WA - GEITA KIGOSI - B UKOM B E NIKONGA - B UKOM B E B UKOLI - GEITA M UKUNGO - B IHA RA M ULO IM WERU - GEITA B UZIRA YOM B O - B IHA RA M ULO NG'OB O - M ISUNGWI GEITA - GEITA SIM A - KWIM B A /M ISUNGWI NYA M ILEM B E/B IHA RA M ULO - GEITA GEITA - GEITA IM WERU - B IHA RA M ULO USHIROM B O - B UKOM B E NYA KA GOM B A - B IHA RA M ULO NYA NGHONA - GEITA USHIROM B O - B IHA RA M ULO IM WERU - B IHA RA M ULO B UHA LA HA LA - GEITA EM IN P A SHA - GEITA GEITA 54 S Q .KM 1.31 12.73 32.50 13.65 15.17 7.44 8.33 10.12 6.52 18.21 6.52 6.69 18.21 11.52 3.87 13.76 14.85 6.04 19.88 7.88 13.13 5.97 3.07 25.18 12.80 5.80 11.94 6.77 5.97 9.02 35.46 5.88 1.42 17.08 13.05 5.59 26.74 10.35 8.87 13.37 12.88 2.96 2.91 5.12 13.05 8.99 62.49 6.12 7.40 17.98 2.99 3.91 4.51 3.02 8.41 1.49 3.38 2.56 15.16 0.78 7.23 6.57 12.80 17.06 18.21 12.56 5.97 3.20 1.56 NOTICE OF ANNUAL GENERAL MEETING Company number 451931 Kibo Mining Public limited company (“the Company”) NOTICE is hereby given that the Annual General Meeting of the Company will be held at 10 a.m on Wednesday 1 July 2015 at the Conrad Hotel, Earlsfort Special business 5 That the authorised share capital of the Company be and is hereby increased from €33,000,000 divided into 400,000,000 Ordinary Shares of Terrace, St Stephen’s Green, Dublin 2, Ireland for the €0.015 and 3,000,000,000 Deferred Shares of purpose of considering, and if thought fit, passing €0.009 each to €39,000,000 by the creation the following resolutions of which resolutions of 400,000,000 new ordinary shares of €0.015 numbered 1, 2, 3, 4, 5 & 8 will be proposed as each ranking equally in all respects with the ordinary resolutions and resolutions numbered 6, existing issued and unissued Ordinary Shares of 7, and 9 will be proposed as special resolutions:Ordinary Business 1 To receive, consider and adopt the accounts for the year ended 31 December 2014 together with €0.015 each. 6 That the memorandum of association of the Company be and is hereby amended by the insertion of the following clause in substitution the Directors and Auditors Reports thereon. for and to the exclusion of existing clause 4 thereof: 2 To appoint Saffery Champness as Auditors of the Company and to authorise the Directors to fix the remuneration of the Auditors. Shares of €0.009 each.” Director of the Company who retires by rotation of Association of the Company. 7 That the articles of association of the Company be and are hereby amended by the deletion of article 4 (a), and for the avoidance of doubt 4 To re-elect Mr Wenzel Kerremans as a Director not clause 4 (b), 4 (c) 4 (d) or 4(e), and by the of the Company who retires by rotation in insertion of the following clause in substitution accordance with Regulation 84 of the Articles of for and to the exclusion thereof: Association of the Company. 55 divided into 800,000,000 Ordinary Shares of €0.015 each and 3,000,000,000 Deferred 3 To re-elect Mr Lukas Marthinus Maree as a in accordance with Regulation 84 of the Articles “The share capital of the company is €39,000,000 “The share capital of the company is €39,000,000 KIBO Mining PLC Annual Report and accounts 2014 divided into 800,000,000 Ordinary Shares of (within the meaning of the said Section 23 and Shares”) and 3,000,000,000 Deferred Shares of cash pursuant to the authority conferred by €0.015 each (hereinafter called “the Ordinary €0.009 each (hereinafter called “the Deferred Shares”)”. 8 That in substitution for all existing authorities of the Directors pursuant to Section 20 of the Companies (Amendment) Act, 1983 (the “1983 Act”), the Directors be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities (within the meaning of Section 20 of the 1983 Act and Section 1021 of the Companies Act, 2014) provided that such power shall be limited to the allotment of relevant securities up to a maximum aggregate nominal value equal to the nominal value of the authorised but unissued ordinary share capital of the Company from time to time. The authority hereby conferred shall expire on the date of the next annual general meeting of the Company held after the date of passing of this resolution, unless previously revoked, renewed or varied by the Company in General Meeting, save that the Company may before such expiry date make an offer or agreement which would or might require relevant securities to be allotted after such authority has expired and the Directors may allot relevant securities in pursuance of such offer or agreement as if the authority hereby conferred had not expired. 9 Subject to the passing of resolution number Section 1023(1) of the Companies Act, 2014) for resolution number 8 above as if the said Section 23 and Section 1022(1) of the Companies Act, 2014 does not apply to any such allotment provided that this power shall be limited to the allotment of equity securities (including, without limitation, any shares purchased by the Company pursuant to the provisions of the Companies Act 1990 and the Companies Act, 2014 and held as treasury shares) up to a maximum aggregate nominal value equal to the nominal value of the authorised but unissued ordinary share capital of the Company from time to time. The authority hereby conferred shall expire at the conclusion of the next annual general meeting of the Company held after the date of passing of this resolution, save that the Company may before such expiry, make an offer or agreement which would or might require relevant securities to be allotted after such authority has expired and the Directors may allot relevant securities in pursuance of such offer or agreement notwithstanding that the power hereby conferred had not expired. The authority hereby conferred may be renewed, revoked or varied by special resolution of the Company. By Order of the Board 8 above and in substitution for all existing Noel O’Keeffe 23 and 24 of the Companies (Amendment) Act, Dated: 2nd June 2015 are hereby empowered pursuant to Sections 23 27 Hatch Street Lower the Companies Act, 2014 to allot equity securities Ireland authorities of the Directors pursuant to Sections Director and Secretary 1983 (the “1983 Act”), that the Directors be and Registered Office: and 24 (1) of the 1983 Act and Section 1023(3) of Dublin 2 KIBO Mining PLC Annual Report and accounts 2014 56 Notes: a Any shareholder of the Company entitled to attend and vote may appoint another person (whether a member or not) as his/her proxy to attend, speak and vote on his/her behalf. For this purpose a form of proxy is enclosed with this Notice. A proxy need not be a shareholder of the Company. Lodgement of the form of proxy will not prevent the shareholder from attending and voting at the meeting. b Only shareholders, proxies and authorised representatives of corporations, which are shareholders, are entitled to attend the meeting. c To be valid, the form of proxy and, if relevant, the power of attorney under which it is signed, or a certified copy of that power of attorney, must be received by the Company’s share registrar, Computershare Investor Services (Ireland) Ltd, Heron House, Corrig Road, Sandyford Industrial Estate Dublin 18 not less than 48 hours prior to the time appointed for the meeting. d All South African shareholders must send their proxies to the transfer secretaries, Computershare Investor Services (Pty) Ltd, 70 Marshall Street, Johannesburg 2001 (PO Box 61051 Marshalltown 2107) not less than 48 hours prior to the time appointed for the meeting. e In the case of joint holders, the vote of the senior holder who tenders a vote, whether in person or by proxy, will be accepted to the exclusion of the votes of the other joint holder(s) and for this purpose seniority will be determined by the order in which the names stand in the register of members of the Company in respect of the relevant joint holding. 57 KIBO Mining PLC Annual Report and accounts 2014 form of proxY KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 58 Annual General Meeting Kibo Mining Public limited company (“the Company”) I/We (See Note A below) ______________________________________of ______________________________________ _ being a shareholder of the Company, hereby appoint (See Note B below): (a) the Chairman of the Meeting; or (b) _____________________________ of _______________________________________ as my/our proxy to vote for me/us and on my/our behalf at the Annual General Meeting of the Company to be held on 1st July 2015 at 10 a.m. . in the Conrad Hotel, Earlsfort Terrace, St Stephen’s Green, Dublin 2 , Ireland and at any adjournment thereof. Please indicate with an ‘‘X’’ in the space below how you wish your votes to be cast in respect of each of the resolutions detailed in the notice convening the Meeting. If no specific direction as to voting is given, the proxy will vote or abstain from voting at his/her discretion. Ordinary Business of the Meeting For Against 1 To receive, consider and adopt the accounts for the year ended 31 December 2014 and the Directors and Auditors Reports thereon. 2 To appoint Saffery Champness as Auditors and to authorise the Directors to fix the remuneration of the auditors. 3 To re-elect Mr. Lukas Marthinus Maree as a Director. 4 To re-elect Mr Wenzel Kerremans as a Director. Special Business of the Meeting 5. That the authorised share capital of the Company be increased. 6. That the memorandum of association of the Company be amended. 7. That the articles of association of the Company be amended. 8. That the Directors be and are hereby generally and unconditionally authorised to exercise all powers of the Company to allot relevant securities. 9. That the Directors be and are hereby empowered pursuant to Sections 23 and 24 (1) of the Companies (Amendment) Act, 1983 and Section 1023(3) of the Companies Act, 2014 to allot equity securities. Dated this_______________day of____________________2015 Signature or other execution by the shareholder (See Note C, turn over): ______________________________________________ 59 KIBO MInIng PLC AnnuAL RePORt And ACCOunts 2014 Notes: (A) A shareholder must insert his, her or its full name Johannesburg 2001 (PO Box 61051 Marshalltown the case of joint accounts, the names of all holders 2107) not less than 48 hours prior to the time must be stated. Chairman of the Meeting, please insert his or her name and address in the space provided and appointed for the meeting. (F) A proxy need not be a shareholder of the Company but must attend the Meeting in person to represent his/her appointer. delete the words “the Chairman of the Meeting or”. (C) The proxy form must: (G) The return of a proxy form will not preclude any shareholder from attending and voting at the Meeting. (i) in the case of an individual shareholder be signed by the shareholder or his or her proxies to the transfer secretaries, Computershare Investor Services (Pty) Ltd, 70 Marshall Street, and registered address in type or block letters. In (B) If you desire to appoint a proxy other than the All South African shareholders must send their attorney; and (H)Pursuant to section 134A of the Companies Act either under its common seal or signed on its (ii) in the case of a corporate shareholder be given behalf by an attorney or by a duly authorized be determined by reference to the Register of Members of the Company at close of business holder who tenders a vote whether in person or on the day which is two days before the date of by proxy shall be accepted to the exclusion of the meeting (or in the case of an adjournment as the votes of the other joint holders and for this at close of business on the day which is two days purpose seniority shall be determined by the before the date of the adjourned meeting). order in which the names stand in the register of (E) To be valid, the form of proxy and, if relevant, the power of attorney under which it is signed, or a certified copy of that power of attorney, must 1996 (and the Companies Act, 2014) entitlement number of votes which may be cast thereat will (D) In the case of joint holders, the vote of the senior holding. Act, 1990 (Uncertificated Securities) Regulations to attend and vote at the meeting and the officer of the corporate shareholder. members of the Company in respect of the joint 1963 and regulation 14 of the Companies Changes to entries on the Register of Members after that time shall be disregarded in determining the rights of any person to attend and vote at the meeting. be received by the Company’s share registrar, Computershare Investor Services (Ireland) Ltd, Heron House, Corrig Road, Sandyford Industrial Estate, Dublin 18 at not less than 48 hours prior to the time appointed for the meeting. KIBO Mining PLC Annual Report and accounts 2014 60 SOUTH AFRICAN SHAREHOLDERS of a person signing this form of proxy in a Notes to the Form of Proxy form of proxy unless previously recorded by the representative capacity must be attached to this transfer secretaries of KIBO or waived by the 1. A KIBO shareholder may insert the name of a proxy or the names of two alternative proxies of the Chairperson of the Annual General Meeting of with or without deleting “the Chairperson of the 6. Any alterations or corrections made to this form of initialled by the KIBO shareholder concerned. The 7. A minor must be assisted by his/her parent proxy and who is present at the Annual General establishing his/her legal capacity are produced exclusion of those whose names follow. of KIBO. KIBO shareholder’s choice in the space/s provided, General Meeting”, but any such deletion must be KIBO shareholders. proxy must be initialled by the signatory/ies. person whose name appears first on the form of or guardian unless the relevant documents Meeting will be entitled to act as proxy to the or have been registered by the transfer secretaries 2. Please insert an “X” in the relevant spaces according 8. Forms of proxy must be received by the transfer you wish to cast your votes in respect of a lesser Limited at 70 Marshall Street, Johannesburg, 2001 number of ordinary shares held in respect of which than 10 a.m.. on the 29th June 2015. to how you wish your votes to be cast. However, if secretaries, Computershare Investor Services (Pty) number of shares than you own in KIBO, insert the (P O Box 61051, Marshalltown, 2107) by not later you desire to vote. Failure to comply with the above 9. The Chairperson of the Annual General Meeting or to abstain from voting at the Annual General absolute discretion, which is completed other shareholder’s votes exercisable thereat. A KIBO 10.If required, additional forms of proxy are available all the votes exercisable by the KIBO shareholder 11. Dematerialised shareholders, other than by own and in respect whereof abstentions recorded may of proxy and must provide their CSDP or broker of will be deemed to authorise the proxy to vote may accept or reject any form of proxy, in his Meeting as he/she deems fit in respect of all the than in accordance with these notes. shareholder or his/her proxy is not obliged to use from the transfer secretaries of KIBO. or by his/her proxy, but the total of the votes cast name registration, must NOT complete this form not exceed the total of the votes exercisable by their voting instructions in terms of the custody. the shareholder or by his/her proxy. To be completed and mailed to: it is signed. PO Box 61051 will not preclude the relevant KIBO shareholder 2107 speaking and voting in person thereat to the OR Where there are joint holders of shares, the vote Computershare Investor Services (Pty) Limited determined by the order in which the names stand 70 Marshall Street 3. The date must be filled in on this proxy form when Computershare Investor Services (Pty) Ltd 4. The completion and lodging of this form of proxy Marshalltown from attending the Annual General Meeting and Johannesburg exclusion of any proxy appointed in terms hereof. To be completed and hand delivered to: of the senior joint holder who tenders a vote, as Ground Floor in the register of members, will be accepted. JOHANNESBURG 5. Documentary evidence establishing the authority 61 KIBO Mining PLC Annual Report and accounts 2014 NOTES: KIBO Mining PLC Annual Report and accounts 2014 62 NOTES: 63 KIBO Mining PLC Annual Report and accounts 2014 NOTES: KIBO Mining PLC Annual Report and accounts 2014 64 Highlights 2014 Rukwa Coal to Power (RCPP) l Completion of Phase 1, Stage 1 (Concept Study) of the Definitive Mining Feasibility Study (DMFS) on the Rukwa Mineral Resource Target Programme for 2015/2016 RCPP l l l l l l Completion of the Pre-feasibility Study (“PFS”) for the associated 250-350 MW coal fired thermal power plant construction Completion of the preliminary base case financial model based on the results of the DMFS and the PFS Agreement reached with Tanzanian Government on terms of reference under which a Power Purchase Agreement, Grid Connection Agreement and Coal Sale Agreement for RCPP will be concluded Negotiations progressed to advanced stage with a number of potential co-development partners resulting in recent announcement (20th April 2015) on the signing of a Joint Development Agreement with China based EPC contractor, SEPCOIII. Complete Integrated Coal to Power Definitive Feasibility Study on the RCPP Complete Financial Close for the project by the end of 2015 and commence construction in early 2016. Imweru l Complete Definitive Feasibility Study Haneti l l Complete geophysical interpretation study based on newly available high resolution airborne geophysical survey data from recent Tanzanian Government survey Implement drill programme at Haneti on priority targets at Mihanza and Mwaka Hills. Imweu Project (Gold) l l l l Revised Mineral Resource estimate for project of 15.0 million tonnes at 1.14 g/t gold, 0.4 g/t cutoff (550,000 oz.) based on successful drill programme completed in December 2013 Optimisation and financial modelling indicates potential feasibility for mine development Commencement of Definitive Mining Feasibility Study on project with completion of Preliminary Economic Assessment (PEA) report Results of PEA indicate potential mine life of 7-10 years based on current Mineral Resource with potential to extend by a further 6 years based on expansion of current resource. Haneti Project (Ni-Cu-PGM) l Independent consultant geochemical report confirms that the Mihanza Hill soil and rock anomaly “indicates a signature with the potential to represent a significant magmatic Ni-Cu sulphide source”. Morogoro (Gold) and Pinewood (Uranium) projects l Joint Ventures secured which can see up to US$800,000 expenditure on each project by JV partner to maintain a 50% interest in the projects. Pinewood & Morogoro l Re-commence exploration under Joint Ventures with Metal Tiger on Pinewood Uranium and Morogoro Gold Projects. Design and Print by Modern Printers: 056 7721739 2014 Annual Report and Accounts 14
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